Overview
- A federal judge directed Circle to blacklist a Zama smart-contract address and Circle executed the freeze on Saturday, immobilizing about 12.6 million USDC in the protocol’s cUSDC contract.
- The freeze traces to a class action accusing Overnight Finance founder Maxim Ermilov of moving more than $15 million from shared treasury wallets before a governance vote, and Ermilov disputes the allegations.
- Because Zama’s cUSDC wraps and pools underlying USDC, blacklisting the contract locked the entire pool and blocked access to funds belonging to unrelated Zama users.
- Zama paused its confidential token contracts, said it received no prior warning, and is investigating while the plaintiffs told the court they would consider advancing funds to compensate affected third parties.
- The case has a June 1 emergency hearing and could set a legal precedent clarifying issuer freeze powers over centrally issued stablecoins used inside privacy wrappers.