A new chapter in the ongoing debate over cryptocurrency compliance has emerged, with on-chain investigator ZachXBT once again at the forefront of the discussion. This time, his sharp criticisms have targeted the XRP community, highlighting Ripple’s controversial standing among stablecoin ecosystems.
The controversy originated when news outlet WatcherGuru shared that Circle, known for issuing USD Coin (USDC), has applied for federal trust bank status in the U.S. Almost immediately, ZachXBT responded with pointed accusations, claiming that Circle has ignored illicit activities associated with North Korean operators using their platform.
“Circle / USDC is the main tool for DPRK IT workers to make transactions. They currently do NOTHING to track or halt this activity while claiming to be compliant,” he stated, revealing substantial transaction volumes linked to these operations. He raised concerns that this negligence reflects a broader issue in the crypto landscape known as the “crime super cycle.”
Is Ripple Less Reliable Than Competitors?
In a bid to defend XRP, one supporter queried, “Should we instead be using RLUSD?” This questioned Ripple’s upcoming asset-backed stablecoin. ZachXBT’s response was straightforward: “I trust Circle, Paxos, or Tether way more than Ripple.”
When asked why he preferred Tether—often scrutinized for its reserve transparency—over Ripple, he asserted, “These options have real users; Ripple does not. Their user base is artificially inflated through paid partnerships.”
The XRP supporter fired back, challenging this stance as “lazy,” pointing out Ripple’s integrations with various platforms like AeonPay and Alchemy Pay, and suggesting that paid partnerships are a common growth strategy in the industry. Although ZachXBT did not further elaborate, his statements fit a pattern of previous criticisms he has offered.
Earlier this year, he noted that a trustworthy layer-1 blockchain should have native stablecoins from established issuers like Circle, Tether, and Paxos. He pointed out that neither ADA nor XRP had such backing from major stablecoin providers.
In analyzing cryptocurrency flows, he referenced a significant movement of over $109 million in XRP from a wallet linked to Ripple’s co-founder Chris Larsen to various exchanges. “I guess it’s fortunate that nobody tracks XRP transactions from wallets affiliated with the founders,” he remarked dryly.
In response to a request to investigate a potential XRP scam, he cynically noted that the wallet in question could not have scammed more than the XRP founders, who frequently appear to sell vast amounts of tokens, leading to market instability.
These comments paint a picture of a researcher who, while critical of compliance among established stablecoin players, considers Ripple to be particularly problematic due to what he perceives as manufactured network growth and ongoing insider profit-taking.
As of now, Ripple Labs, Circle, Paxos, and Tether have remained silent about these latest claims. The price of XRP at the time of this writing was reported at $2.1978.
