Zama Founder: cUSDC Freeze Event Linked to Overnight Hacker Funds, Pausing cUSDC and Other Contracts

Odaily News Zama Protocol founder Rand posted on X platform, stating that with the assistance of “on-chain detective” ZachXBT, the team has identified the root cause of the recent cUSDC freeze event. It is unrelated to the Zama protocol itself or privacy technology. The incident originated from a wallet address associated with the Overnight Finance hack depositing over $12.5 million USDC into Zama's cUSDC wrapper contract. As this address was not on any sanctions list nor flagged by KYT (Know Your Transaction) tools at the time of deposit, the funds entered the protocol.

Rand stated that law enforcement agencies recently issued asset restriction orders against multiple wallets linked to the hack. Because the cUSDC wrapper contract had a small balance, with over 99% of its funds coming from the aforementioned hacker address, the court ordered the entire wrapper contract to be frozen to restrict the flow of related funds. Rand emphasized that this measure is not a sanction against Zama or the privacy protocol, but a common judicial freezing measure in the DeFi space.

To cooperate with the investigation, Zama has paused the operation of the cUSDC, cUSDT, and cWETH contracts until the investigation is complete, all involved addresses are identified, and corresponding measures are taken. Rand reiterated that Zama adheres to the principle of "compliant confidentiality" and will not tolerate any illegal activities. He also stated that a more detailed post-mortem and plans for handling similar requests in the future will be published subsequently.