Zama cUSDC — Court-Ordered Circle Blacklist Freezes $12.6M in Pooled User Funds

Timeline: May 11, 2026 — Wallet 0xf7Fcc767dE537953b3519D4b3097A24A6dFE1c84, linked to Overnight Finance treasury operations, deposits approximately $12.4M USDC into Zama's cUSDC contract. This single inflow represents more than 99% of the total pool. May 29, 2026 — US District Judge P. Casey Pitts (N.D. Cal.) issues a Temporary Restraining Order in Newton AC/DC Fund LP et al. v. Maxim Ermilov et al., ordering Circle to blacklist assets linked to the dispute. Plaintiffs include Patagon Management. Zama and its users receive no advance notification. May 30, 2026 01:08:11 UTC — Circle executes blacklist of Zama cUSDC contract address 0xe978F22157048E5DB8E5d07971376e86671672B2 on Ethereum. The blacklist freezes the entire pooled contract — not just the disputed wallet — locking 12,606,386.10 USDC of commingled user funds. May 30, 2026 — On-chain investigator ZachXBT reports the freeze via his Telegram channel approximately 7 hours after execution. He traces the frozen balance to 12,606,386 USDC and links the root cause to the Overnight Finance civil dispute. Quote: 'Regardless, it is precedent-setting to unilaterally freeze the contracts or addresses of a protocol where funds have been commingled with Zama users.' May 30, 2026 — Zama CEO Rand Hindi confirms team was not notified before Circle executed the blacklist. He describes the protocol as having been 'caught in a crossfire.' Zama pauses cUSDC, cUSDT and cWETH wrappers. Legal team engages US counsel. Zama states it will attempt to isolate the flagged deposit to restore access for uninvolved users. June 1, 2026 — Court hearing scheduled. Outcome and timeline for potential unfreeze remain public as of reporting date. Circle has not issued a public statement on the action. Approximately $200K of the frozen pool belongs to uninvolved Zama users with no connection to Overnight Finance.