TLDR Tech / Crypto
Court-Ordered Circle Freeze Traps $12.6M in Zama's cUSDC Contract
A US federal court temporary restraining order directed Circle to blacklist Zama's cUSDC Ethereum contract on May 29, freezing $12.6 million in pooled USDC tied to a civil lawsuit alleging that Overnight Finance's treasury was misappropriated. The problem is that Zama's privacy wrapper holds commingled user funds, so the freeze locked out every depositor in the contract, not just the wallet connected to the disputed transfer. Zama has paused its cUSDC, cUSDT, and cWETH wrappers while engaging US counsel. It says it will isolate the flagged deposit to restore access for unaffected users. A full court hearing is scheduled for June 1.
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