Don't judge on this yet, I suspect that address owner stole that money, it's better for centralized power to deal with criminals, if it's on decentralized projects the criminal will escape with that money, if this is what happened I'm glad the money is frozen
It doesn't matter what he did. Maybe he stole it maybe he did not. Was he sentenced? Was there a conviction?
They froze his money without a trial so this shows how dangerous using a stablecoin can be when somebody suspects you of something and you get your money stolen from you which can make you unable to hire a lawyer and defend in court. It can also make you unable to travel to whenever you want to defend your case and so on.
USDC is certainly not decentralized and they are a legit business under the US jurisdiction. They need to comply when the government asks.
It's the same for most of the exchanges and other coins and tokens. Even if it were decentralized coin, the authorities would make it hard for the person to cashout.