Court Order Forces Circle to Freeze $12.6M USDC Linked to Zama Privacy Protocol

Stablecoin supply hits $322B; USDT+USDC hold ~83% as the CLARITY Act advances in the U.S. Senate. Liquidity, exchange pairing, and custody models may shift.

The post Circle Freezes $12.6M in Stablecoins Linked to Zama Without Prior Notice: ZachXBT appeared on BitcoinEthereumNews.com. Stablecoin issuer Circle froze $12.6 million in USDC dollar-pegged tokens linked to privacy protocol Zama’s confidential USDC smart contract on Saturday, according to onchain sleuth ZachXBT. The smart contract is “publicly labeled” on block explorers and the privacy protocol’s technical documentation, ZachXBT said.  The exact reason for the freeze is “unclear,” he said, adding 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: “Overnight 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.” Source: ZachXBT “From my understanding, the Zama team does

The post ZachXBT Says $12.6 Million In Zama CUSDC May Have Been Frozen After Circle Blacklisting appeared on BitcoinEthereumNews.com. A new controversy is making the rounds in crypto after blockchain investigator ZachXBT said Circle may have blacklisted a contract tied to Zama’s confidential USDC, or cUSDC, on Ethereum, freezing around $12.6 million in user funds. According to ZachXBT, the blacklist action happened roughly seven hours before he shared the update, and it appears to have locked the contract address used for Zama’s privacy-focused stablecoin setup. If accurate, that would mean users suddenly lost access to a very large amount of funds without much warning, which is exactly the kind of thing that tends to set off alarms in the crypto world. What makes the situation even messier is the fact that the address allegedly froze after recently taking part in an Overnight Finance governance vote about treasury allocation. That detail matters because it suggests the contract wasn’t

The post Payment Interoperability Crucial As Stablecoins Expand Use appeared on BitcoinEthereumNews.com. Lawrence Jengar May 29, 2026 20:59 Global payments face fragmentation issues, but stablecoins like USDC and multichain designs offer a path to seamless money movement. Global payment systems remain deeply fragmented, despite rapid advances in digital finance. A lack of interoperability across networks and standards is slowing cross-border transactions, tying up liquidity, and forcing businesses to grapple with operational complexity. However, stablecoins like USDC and blockchain-based multichain infrastructure are emerging as potential solutions to bridge these gaps. According to a 2024 survey, 40% of companies reported losing business due to cross-border payment inefficiencies. Traditional systems like SWIFT, ACH, and SEPA operate on siloed standards and timelines, leading to settlement delays and reconciliation headaches for institutions operating across multiple

The post Banking Apps Issue Stablecoins—But Can Users Use Them? appeared on BitcoinEthereumNews.com. Retail customers are finally seeing stablecoins appear inside their everyday banking and payments apps. That’s a milestone—but it’s only the first step. Turning a launch into durable, habit-forming utility is the harder, more important challenge. On May 27, 2026, Block’s Cash App began a phased rollout of USDC to roughly a quarter of its nearly 60 million users, supporting Solana, Ethereum, Polygon, and Arbitrum, with daily and weekly send/receive caps; the company said it aimed to reach all users by week’s end CoinDesk. Cash App’s press release also noted 59 million monthly customers, auto-conversion of received USDC to U.S. dollars in-app, and cited adjusted stablecoin transaction volume of $13.28 trillion over the last 12 months Cash App (press release). The same day, SoFi announced SoFiUSD, a 1:1 USD-redeemable stablecoin issued by SoFi Bank, N.A., embedded directly in its consumer

The post Circle Freeze Traps Funds in Zama cUSDC Contract appeared on BitcoinEthereumNews.com. Circle froze a Zama-linked cUSDC contract after an Overnight Finance hacker wallet deposited over $12.5M USDC. A Circle compliance freeze has affected a Zama-linked confidential USDC wrapper contract after funds tied to the Overnight Finance hack entered the contract. The freeze trapped user funds because more than 99% of the cUSDC contract balance came from one flagged depositor. Zama said the action was not a sanction against its protocol or privacy tools. Circle Freeze Hits Zama-Linked cUSDC Contract Zama said the issue started after an address linked to the Overnight Finance hack deposited about $12.5 million USDC. The funds entered its confidential USDC wrapper contract before the address was flagged. The company said the wallet was not on any sanctions list at the time of deposit. It also said its Know Your Transaction tools did not flag the address then. Thanks to @zachxbt, we found th

The $12.6 million in USDC was likely frozen in connection with an ongoing but unrelated civil court case, according to onchain sleuth ZachXBT.

Circle froze a Zama-linked cUSDC contract after an Overnight Finance hacker wallet deposited over $12.5M USDC. A Circle compliance freeze has affected a Zama-linked confidential USDC wrapper contract after funds tied to the Overnight Finance hack entered the contract. The freeze trapped user funds because more than 99% of the cUSDC contract balance came from […] The post Circle Freeze Hits Zama-Linked cUSDC Contract, Trapping User Funds appeared first on Live Bitcoin News.