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US COURT FREEZES $12.6M IN CIRCLE STABLECOIN

AI DESK1 MIN READ
SUN, MAY 31, 2026

■ AI-SUMMARIZED FROM 1 SOURCE ▸ TIMELINE

A federal judge ordered Circle to blacklist Zama's confidential USDC (cUSDC) contract, freezing approximately $12.6 million in funds. The action stems from a civil lawsuit against a DAO and may impact uninvolved users holding assets in the contract.

Circle complied with the court order Friday night, blacklisting the cUSDC contract as part of litigation against Zama. The freeze affects roughly $12.6 million in funds held within the contract. The action highlights a growing tension in crypto: centralized stablecoin issuers like Circle can execute account freezes through blacklist functions, raising questions about asset custody and exposure to legal disputes. Users holding cUSDC in the Zama contract may face liquidity challenges despite having no direct involvement in the underlying civil suit. The incident underscores how court orders can create widespread collateral damage in decentralized finance, affecting innocent parties caught in cross-litigation. Circle's blacklist functionality, designed for compliance purposes, has previously drawn scrutiny from crypto advocates concerned about censorship risks and the concentration of control among stablecoin issuers.

■ SOURCES

Techmeme

■ SUMMARY WRITTEN BY AI FROM THE LINKS ABOVE

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