{ "id": 83760, "date": "2026-06-01T08:39:35", "date_gmt": "2026-06-01T01:39:35", "guid": { "rendered": "https:\/\/hbbgroup.net\/circle-freezes-12-6m-of-usdc-linked-to-privacy-protocol-zama\/" }, "modified": "2026-06-01T08:39:35", "modified_gmt": "2026-06-01T01:39:35", "slug": "circle-freezes-12-6m-of-usdc-linked-to-privacy-protocol-zama", "status": "publish", "type": "post", "link": "https:\/\/hbbgroup.net\/en_us\/circle-freezes-12-6m-of-usdc-linked-to-privacy-protocol-zama\/", "title": { "rendered": "Circle freezes $12.6M of USDC linked to privacy protocol Zama" }, "content": { "rendered": "
\n

Stablecoin issuer Circle froze $12.6 million in USDC dollar-pegged tokens linked to privacy protocol Zama\u2019s confidential USDC smart contract on Saturday, according to onchain sleuth ZachXBT.<\/p>\n

The smart contract is \u201cpublicly labeled\u201d on block explorers and the privacy protocol\u2019s technical documentation, ZachXBT said<\/span><\/a>.\u00a0<\/p>\n

The exact reason for the freeze is \u201cunclear,\u201d he said, adding<\/span><\/a> that wallets linked to the Overnight Finance decentralized finance (DeFi) protocol deposited $12.4 million into the Zama protocol on May 11, 2026. He said:<\/p>\n

\u201cOvernight Finance held a governance vote recently to distribute treasury funds after holders alleged the team was rug-pulling. Regardless, it’s precedent-setting to unilaterally freeze the contracts or addresses of a protocol where funds have been commingled with Zama users.\u201d<\/p><\/blockquote>\n

<\/figure>\n

Source: <\/em>ZachXBT<\/em><\/a><\/p>\n

\u201cFrom my understanding, the Zama team does not appear to have been notified of the Circle freeze prior,\u201d he said. Cointelegraph reached out to Circle but did not receive a response by the time of publication.\u00a0<\/p>\n

The company has come under fire for failing to freeze funds<\/span><\/a> following major hacks of crypto platforms, and freezing wallets of legitimate crypto projects and protocols without giving those projects prior notice.\u00a0<\/p>\n

Related: <\/strong><\/em>Tether freezes over $500M of USDT in 30 days, BlockSec data shows<\/strong><\/em><\/span><\/a><\/p>\n

Circle comes under fire for freezing legitimate user funds, but not stolen crypto <\/h2>\n

In March, ZachXBT accused Circle of \u201cwrongfully\u201d freezing 16 stablecoin wallets<\/span><\/a> linked to online casinos and legitimate crypto exchanges.<\/p>\n

The wallets were frozen in connection with ongoing civil court cases in the United States; however, the businesses and wallets \u201cdo not appear related at all,\u201d he said<\/span><\/a>.<\/p>\n

He later added that Circle failed to freeze about $420 million <\/span><\/a>in 15 separate cases involving fraudulent transactions or funds stolen through crypto hacks since 2022.<\/p>\n

<\/figure>\n

A list of 15 incidents since 2022, in which Circle failed to freeze funds, according to ZachXBT. Source: <\/em>ZachXBT<\/em><\/a><\/p>\n

These incidents included the failure to freeze $232 million<\/span><\/a> in stolen user funds from the April 2026 Drift Protocol hack, despite having a six-hour window to act, he said.<\/p>\n

Following the incident, users filed a class action lawsuit<\/span><\/a> against Circle for failing to freeze the funds, which flowed through Circle\u2019s Cross-Chain Transfer Protocol (CCTP), a bridge that allows assets to move between different blockchain networks.<\/p>\n

Magazine: <\/strong><\/em>Are DeFi devs liable for the illegal activity of others on their platforms?<\/strong><\/em><\/span><\/a><\/p>\n<\/div>\n

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph\u2019s Editorial Policy<\/a> and aims to provide accurate and timely information. Readers are encouraged to verify information independently. <\/p>", "protected": false }, "excerpt": { "rendered": "

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