Circle Freezes $12.6M in USDC Funds Amid Overnight Finance Lawsuit

A US court order has led Circle to freeze $12.6 million in USDC funds held in Zama's smart contract. The funds are affected due to the pooled nature of the deposits, where multiple users' assets are stored together.

The freeze is linked to a class action lawsuit against Overnight Finance's founder, Maxim Ermilov, who is accused of misappropriating over $15 million. As a result, Circle has blacklisted Zama's contract, preventing token holders from redeeming their funds.

Zama is investigating and working to separate the disputed funds to restore access for users.