Circle Internet Financial, the company behind the USDC stablecoin, is facing a criminal complaint in Wisconsin after refusing to help recover funds stolen from scam victims. The Walworth County District Attorney’s Office filed a misdemeanor contempt of court charge against Circle on April 20, 2026, setting up what could become a landmark legal test for how stablecoin issuers respond to court orders.
The case centers on approximately 381,235 USDC that a Wisconsin judge ordered Circle to help seize in December 2025. That warrant came after two separate scams drained money from local residents: one victim lost $770,000 in December 2024, another lost $460,000 in August 2025. In total, the victims are out more than $1.2 million.
Circle says it can’t comply. Prosecutors say that’s not an answer.
Circle’s position is that it technically cannot do what the court is asking. The company argues it lacks the capability to invalidate existing USDC tokens and reissue them to a different wallet, which is the mechanism that would effectively move the frozen funds back to victims.
Circle did freeze the stolen USDC, which it has the ability to do. But freezing and recovering are two different things.
