Circle froze roughly $12.6 million in USDC early Saturday morning by blacklisting the Ethereum contract behind open-source cryptography firm Zama's confidential USDC token, dragging a privacy protocol into a dispute it apparently had no direct part in.
The blacklist hit the cUSDC contract at 1:08 a.m. UTC, locking 12,606,386 USDC. Public block explorers label the frozen address as Zama's confidential USDC token.
Rand Hindi, co-founder and CEO of Zama, said on X that the company was looking into the freeze. He later wrote that the contract appeared to have been "caught in a crossfire of another case." Hindi also said he was given no warning by Circle prior to the freeze.
That case is a class action suit filed May 28 in the U.S. District Court for the Northern District of California. Three funds that hold Overnight Finance's OVN token accuse the protocol's creator, Maxim Ermilov, of diverting more than $15 million from a shared treasury. The filing describes Ermilov as a Russian national who has said he lives in Abu Dhabi. Ermilov built Overnight Finance, a DeFi yield platform that issued the USD+ stablecoin and the OVN governance token, following an $850,000 pre-seed raise led by Hack VC in Feb. 2022.
