Circle Blacklists Zama Protocol Address, Freezing $12.6M In User Funds

Trusted Editorial content material, reviewed by main business specialists and seasoned editors. Advert Disclosure

Stablecoin issuer Circle has reportedly blacklisted a sensible contract linked to privateness protocol Zama, freezing roughly $12.6 million in consumer funds. The event, first flagged by on-chain investigator ZachXBT, includes the protocol’s Confidential USDC (cUSDC) contract deployed on Ethereum seven hours earlier than ban. The affected contract handle had been publicly documented in Zama’s docs and visual on blockchain explorers, making the freeze each traceable and verifiable in actual time.

Zama’s Frozen Funds Draw Relationship To In a single day Finance And Authorized Dispute

In keeping with additional findings by ZachXBT, the freeze could also be not directly tied to current controversy and authorized points surrounding the asset-management and yield-generating protocol In a single day Finance.

Information exhibits that pockets handle 0xf7fcc deposited roughly $12.4 million in USDC into the Zama contract on Could 11, 2026. This pockets seems to be related to In a single day Finance, which has lately been embroiled in governance tensions. Notably, token holders had alleged a doable rug pull by the event workforce. This resulted in a governance vote on the DeFi protocol to distribute its treasury belongings.

ZachXBT shared extra info suggesting that In a single day Finance can be going through a civil case in court docket. One of many plaintiffs within the protocol case is Patagon Administration, a agency recognized within the DeFi area for participating in aggressive governance methods, resembling hostile DAO takeovers/RFV raiding. Whereas no direct causal hyperlink has been confirmed between Circle actions and these occasions, the overlap between authorized proceedings, treasury actions, and the frozen funds has raised considerations about how interconnected DeFi protocols can expose unrelated customers, i.e., Zama customers on this case, to exterior dangers.

Circle’s Unilateral Motion Units Undesirable Precedent

Circle’s freeze has additionally reignited criticism of transparency practices by centralized issuers. In keeping with ZachXBT, the Zama workforce seems to have acquired no prior discover earlier than the cUSDC contract was blacklisted. If confirmed, this may amplify rising considerations about unilateral enforcement actions affecting decentralized functions and their customers with out warning.

Earlier in March 2026, Circle reportedly froze over 16 scorching wallets related to numerous entities with out publicly explaining its rationale. The newest motion, nonetheless, goes a step additional by concentrating on a protocol-level contract the place consumer funds are pooled, fairly than remoted wallets. This distinction is important as a result of it raises questions on custodial danger in supposedly decentralized techniques.

On the time of reporting, Circle has not issued an official rationalization for its unilateral motion in freezing Zama’s cUSDC contract.

Featured picture from Shutterstock, chart from Tradingview

Editorial Course of for bitcoinist is centered on delivering completely researched, correct, and unbiased content material. We uphold strict sourcing requirements, and every web page undergoes diligent evaluate by our workforce of prime expertise specialists and seasoned editors. This course of ensures the integrity, relevance, and worth of our content material for our readers.