Zama's $12.5M in cUSDC unfrozen by US court

A U.S. court has lifted a freeze on $12.5 million in cUSDC that was locked in a smart contract belonging to Zama, a privacy blockchain protocol based on Fully Homomorphic Encryption (FHE), Cointelegraph reported. The funds were unfrozen after three days. In response to the incident, Zama announced it will significantly accelerate its regulatory compliance roadmap. The situation originated last weekend from a legal dispute over a stake in Overnight Finance, a project entirely unrelated to Zama. On May 11, one of the parties in that lawsuit deposited $12.5 million into Zama's cUSDC wrapper contract, an amount that constituted over 99% of the total assets in the pool at the time. The plaintiff in the case obtained a temporary restraining order (TRO) against Circle to prevent asset movement, leading Circle to freeze Zama's entire smart contract in compliance with the court order. Although Zama was not a defendant in the lawsuit, its entire asset pool was impacted.