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Circle Blacklists Zama Confidential USDC Contract on Ethereum, Freezing $12.6 Million

Circle Blacklists Zama Confidential USDC Contract on Ethereum, Freezing $12.6 Million

According to Zama co-founder Rand Hindi, Circle’s freeze stemmed from funds linked to the Overnight Finance hack entering Zama’s cUSDC wrapper, leaving other users’ commingled deposits inaccessible.

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Fact Check
The originator ZachXBT's Telegram post (t.me/investigations/332) is cited by multiple independent crypto news outlets — Odaily, BlockBeats, and PaNews — all reporting the same key facts: Circle blacklisted Zama's confidential USDC (cUSDC) contract on Ethereum, freezing approximately $12.6 million, with the reason undisclosed. SolanaFloor's X post adds corroborating context. No conflicting evidence was found. Circle and Zama have not formally responded, hence not fully verified by primary parties, but the underlying on-chain blacklist event reported by ZachXBT is corroborated across reputable trackers.
Summary

Circle’s blacklist of Zama’s confidential USDC contract on Ethereum froze about $12.6 million after a wallet tied to the Overnight Finance hack deposited more than $12.5 million into Zama’s cUSDC wrapper, according to Zama co-founder Rand Hindi. Hindi said the action was unrelated to Zama itself or to privacy features, and credited ZachXBT with helping identify the source. Because Circle’s compliance action was applied at the contract level rather than only to the flagged depositor, unrelated users whose USDC was pooled in cUSDC were also affected. Zama paused cUSDC, cUSDT, and cWETH pending investigation and said it plans to publish a post-mortem and a framework for handling future freeze requests. ZAMA’s token fell 18.2% intraday from about $0.039 to $0.032 before partially recovering to $0.035, while 24-hour trading volume rose 61% to $73.9 million.

Terms & Concepts
  • USDC: A U.S. dollar-pegged stablecoin issued by Circle that can be frozen by the issuer when required by court or compliance actions.
  • cUSDC: Zama’s confidential wrapper for USDC on Ethereum, where user deposits are pooled in a contract and represented in a privacy-oriented form.
  • Stablecoin freeze: A restriction that blocks transfers or access to tokens, often imposed by an issuer in response to legal or compliance requirements.