Key Takeaways:
Circle blacklisted Zama’s cUSDC Ethereum contract on May 30, 2026, freezing $12.6M in pooled USDC funds.A U.S. federal court TRO tied to Newton AC/DC Fund LP’s lawsuit against Maxim Ermilov triggered the freeze.Zama plans to isolate the flagged deposit before a June 1 hearing to restore access for unaffected users.“Looks like Circle blacklisted the Zama (privacy protocol) Confidential USDC (cUSDC) contract on Ethereum 7 hours ago, which has frozen 12.6M USDC of user funds,” ZachXBT wrote. He called the action precedent-setting, adding: “Overall, I feel bad for Zama users who have now been indirectly impacted with this mess of a U.S. civil case.”
Ermilov, a Russian citizen based in the Middle East, disputes those characterizations and says the wallets held personal and team funds, the OVN token carries no security status, and the move to Zama was for privacy and personal security reasons.
Zama says it received no advance notice from Circle or the court before the blacklist was executed. The contract had been publicly deployed for roughly 154 days, and the depositing address showed no sanctions flags or KYT alerts at the time of deposit. Rand Hindi, Zama’s co-founder and CEO, stated plainly: “This has nothing to do with Zama, or privacy.”
