Circle Freeze Leaves Zama Users Trapped in Compliance Quagmire

A recent Circle compliance freeze has left user funds trapped in a Zama-linked cUSDC contract, causing disruptions for users of the DeFi platform.

The incident occurred when an Overnight Finance hacker wallet deposited over $12.5 million USDC into the contract, which was later flagged by Circle's compliance system due to a court order on several wallets linked to the hack.

The freeze, intended as a standard response to the flagged addresses, affected not only the suspected hacker's wallet but also trapped funds from other users who had deposited their assets into the cUSDC contract.