Circle Freezes $12.6M in USDC From Zama Privacy Contract Following Federal Court Order
By
Jamie Redman
The bagel they save for the regulars. Don't skim, savour.
Summary
Circle blacklisted a smart contract associated with Zama's privacy protocol on May 30, freezing approximately $12.6 million in USDC following a U.S. federal court order. The frozen address is a pooled confidential USDC wrapper (cUSDC) that uses fully homomorphic encryption. The court order is connected to a civil lawsuit against Overnight Finance founder Maxim Ermilov. This incident raises significant questions about the use of centralized stablecoins like USDC in decentralized finance (DeFi) smart contracts, as it demonstrates that court-ordered blacklisting can impact DeFi protocols even when they are designed for privacy and encryption.
Key quotes
· 4 pulledCircle blacklisted a publicly labeled Ethereum smart contract tied to Zama's privacy protocol on Saturday, freezing approximately $12.6 million in USDC following a U.S. federal court order.
The frozen address...is labeled 'Zama: cUSDC Token' on Etherscan and in Zama's own documentation.
It functions as a pooled confidential USDC wrapper using fully homomorphic encryption to obscure token transactions.
Circle's Zama Blacklist Freezes $12.6M, Raising Questions About USDC Use in DeFi Contracts
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