Circle blacklisted the Ethereum contract behind Zama's confidential USDC (cUSDC) on May 30, locking 12,606,386 USDC. The freeze stems from a class action suit filed May 28 by three OVN-holding funds against Overnight Finance founder Maxim Ermilov, alleging he moved more than $15.7M from treasury wallets.

Because cUSDC is a wrapper holding the USDC that backs every confidential token holder, blacklisting the contract froze the entire pool rather than a single deposit.

Zama CEO said the protocol received no advance notice and that its contract was "caught in a crossfire" of an unrelated case.