Circle freezes Zama contract due to a civil lawsuit in the United States, with the plaintiff being "Vulture Investor" Patagon Management, targeting Overnight Finance. This is not an isolated incident; in March of this year, Circle froze 16 corporate wallets due to undisclosed lawsuits, indicating that its compliance enforcement is driven by external judicial processes, and its discretionary space is being constrained.

The key detail is that the Zama team apparently was not notified in advance, and the plaintiff may have misrepresented the connection between the frozen addresses and the Zama contract. This means that privacy agreements and their users are inadvertently affected by legal disputes involving third parties (Patagon and Overnight), highlighting the "joint freeze" risk faced by centralized stablecoin issuers when responding to court orders, even if the targeted protocol itself is not a party to the lawsuit.
Patagon has previously been deeply involved in aggressive governance and litigation in projects like Aragon DAO, and its strategy is expanding influence through legal channels.
On May 30, on-chain investigator ZachXBT further disclosed that, according to his understanding, the reason Circle blacklisted the Zama cUSDC contract address, resulting in approximately $12.6 million in funds being frozen, is related to a civil lawsuit in the United States, and that Circle should have received enforcement notices from the U.S. court.
Additionally, the Zama team apparently was not notified in advance of the freeze, and the plaintiff may have misrepresented the connection between the frozen addresses and the Zama contract to the court.
This civil lawsuit was filed against Overnight Finance, with one of the plaintiffs being Patagon Management, an entity known for malicious DAO takeovers and RFV (Reserve Fund Value) plundering protocols. Zama users will be indirectly affected by this legal dispute.
{future}(ZAMAUSDT)