Circle Freezes Zama Users' Confidential USDC Funds Amidst Dispute

Circle Internet Group has taken action against a Confidential USDC (cUSDC) contract associated with privacy protocol Zama on Ethereum. The stablecoin issuer blacklisted the contract, freezing around $12.6 million worth of USDC funds held within Zama's system.

A blockchain investigator pointed out that the freeze may have been precipitated by a dispute between Overnight Finance and Patagon Management, as an address associated with Overnight Finance deposited approximately $12.4 million into the contract on May 11th. The incident has sparked debate over the use of centralized controls in stablecoins, particularly regarding blacklisting tools.