CIRCLE JUST FROZE $12.6M IN USER FUNDS - Not From a Hack. From a Lawsuit.

A few hours ago, Circle quietly added Zama's $cUSDC contract to its $USDC blacklist.
🔰 $12.6M in user deposits. Frozen instantly
Zama is a confidential payments protocol on Ethereum. Its cUSDC contract lets users hold and move USDC privately. Circle blacklisted the entire contract in one move.
The trigger was not a hack. It was a US civil case.
🔰 HERE IS THE CHAIN OF EVENTS
🔹 On May 11, a wallet linked to Overnight Finance deposited $12.4M into Zama.
🔹 Overnight Finance is being sued by its own token holders, who allege the team is winding the protocol down to benefit insiders.
🔹 One plaintiff is Patagon Management. A Delaware LLC run by Diogenes Casares. The same firm that went after Aragon, Spartacus DAO and Concave Finance. Crypto media has labeled them "RFV raiders."
🔹 Patagon won a court order to freeze the assets. Circle complied by blacklisting the whole Zama contract.
🔹 Every other user in that contract got frozen as collateral damage. Zama was never notified.
🔰 NOW HOLD THAT NEXT TO CIRCLE'S RECORD
ZachXBT's "Circle Files" thread documented over $420M in losses across multiple hacks where Circle was slow to act.
The Drift Protocol hack in April was one of them. $232M in stolen USDC moved across chains using Circle's own bridge over six hours.
Circle did nothing.
🔰 THE PATTERN IS HARD TO IGNORE
✅ Circle stays silent when stolen money moves.
✅ Circle acts fast when lawyers send paperwork.
CEO Jeremy Allaire has said for months that USDC only gets frozen under court order. Not on social pressure. Not even during active hacks.
That same policy just froze $12.6M in unrelated user funds over a private commercial dispute.
The real question is not whether Circle can freeze funds.
It is who they choose to protect, and who they leave caught in the middle.
#Circle #Crypto