Zamaโs swift response and transparent handling quickly resolved the USDC freeze.
They protected the protocol under pressure and came out stronger.
This only made Zama tougher and more trusted in FHE privacy. Great job! ๐ซก @zama#zama
Zamaโs core mission remains unchanged.
Regulatory compliance is essential to achieve our goals of enhanced institutional usability and broader adoption.
Anonymity exploited for criminal purposes cannot be accepted in institutional environments.
@zama@randhindi#zama
Thanks to @zachxbt, we found the root cause and will be taking the appropriate actions to unblock the situation. Tldr; this has nothing to do with Zama, or privacy.
The issue stems from an address related to the Overnight Finance hack, which deposited over ~$12.5m USDC into our confidential USDC wrapper contract. Back when they did, their address wasn't on any sanctions list and was not flagged by our KYT tools. However, a court order yesterday night placed a restraining order on various wallets linked to the hacker.
Since there wasn't much utility yet for the cUSDC wrapper, there were very little funds in it, and as a result the vast majority (>99%) of funds in the cUSDC contract came from that single hacker's deposit. Because of this, the court order asked to freeze our wrapper contract to freeze the hacker's fund.
So the sanction was not against Zama, or against privacy. It was a classic restraining order as we see often in DeFi, and we should have been notified so we could have taken the appropriate actions on our side.
I want to be very clear about something: our posture has always been compliant confidentiality, and we will not tolerate any illicit behavior in our protocol. It's also really useless for hackers to try to use Zama to hide their trail as we are precisely not a mixer and we do not obfuscate the sender and recipient, only balances and amounts. Eg you can see the hacker's cUSDC transactions here: https://t.co/yFtdaz5ytU
We are in touch with the various people involved to resolve the situation asap. In the meantime, we will pause the cUSDC, cUSDT and cWETH contracts until we have finished our investigation, identified all addresses linked to this case and taken appropriate action.
I will share a more detailed post-mortem and how we plan to deal with such requests in the future.
@randhindi@zachxbt Fully agree with Zama.
FHE is for institutions to protect data compliantly โ not for criminals. Compliant confidentiality is where it belongs. @zama
@randhindi Important clarification: This freeze has zero impact on Zamaโs FHE technology.The core innovation โ computing on encrypted data โ is still fully intact and industry-leading. It does highlight why we should think carefully about centralized stablecoin dependencies though.
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@sinceOctober8@randhindi, please announce your response plan as soon as possible. Considering the amount of investment raised and auction fundraising so far, this situation doesn't make sense, and if things continue this way, you will become the worst fraudster.
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This is my question for the AMA:
What do you think will be the first real-world use case where everyday users can actually feel the benefit of Zamaโs privacy-enabled public blockchain?
On-chain privacy, institutions, future of Web3.
@zama AMA at 8 PM KST with @randhindi ๐
As institutional capital continues to flow into crypto and traditional finance becomes increasingly onboarded to blockchain, transparency is no longer optional, itโs the default.
However, this also means every transaction, position, and strategy is publicly exposed.
Thatโs why privacy is becoming one of the most important narratives in Web3.
This is where zama comes in.
Zama enables true on-chain privacy using Fully Homomorphic Encryption (FHE)
โ Transactions remain encrypted from input to state changes
โ Data is never decrypted, even during computation
Why FHE is different from existing privacy solutions:
MPC (Multi-Party Computation)
- Decentralized
- No single trusted party required
ZK
- Not just verification
- Can compute directly on encrypted data
TEE
- Software-based security
- No hardware dependency
Private Chains
- Still composable with public chains
- Fully verifiable
Zama isnโt just another privacy layer.
Itโs building privacy-native infrastructure for public blockchains.
Letโs deep dive into this together in the AMA $ZAMA.
This is my second question for the AMA:
In simple terms, how do you see the ZAMA token being used in the long run, and why should regular users care about holding or using it beyond speculation?
@TheBlock__ @gdog97_@ethena
How long are you going to stay silent about this? Responding so irresponsibly is not acceptable. Please share your position and your future plans right away