Crypto Today: Circle Freezes $12.6 Million in Stablecoins Linked to the Zama Privacy Protocol

Today in crypto, Circle freezes $12.6 million in stablecoins linked to the Zama privacy protocol, spot Bitcoin ETFs logged a record 10-day outflow streak totaling nearly $3 billion, and the US Commodity Futures Trading Commission (CFTC) approved a Bitcoin perpetual futures contract for prediction markets platform Kalshi.

Circle freezes $12.6 million in stablecoins linked to the Zama privacy protocolCircle, the issuer of the USDC stablecoin,froze $12.6 millionin USDC dollar-pegged tokens linked to privacy protocol Zama’s confidential USDC smart contract on Saturday.

The exact reason Circle froze the stablecoins is “unclear,”accordingto onchain sleuth ZachXBT, adding that he previously flagged more than 16 incidents in which the stablecoin issuer wrongfully froze wallets.

Wallets linked to the Overnight Finance decentralized finance (DeFi) protocol, which is currently facing a civil court case, deposited $12.4 million into the Zama protocol earlier in May, according to ZachXBT. He said:

“Overnight Finance held a governance vote recently to distribute treasury funds after holders alleged the team was rug-pulling. Regardless, it's precedent-setting to unilaterally freeze the contracts or addresses of a protocol where funds have been commingled with Zama users.”Source:ZachXBT

The incident drewcriticismfrom the crypto community, with some users, analysts and investors arguing that Circle freezes wallets and funds tied to legitimate users, while neglecting to freeze stolen funds following crypto hacks.

Spot Bitcoin ETFs see record 10-day outflow streak, analyst calls it ‘contrarian indicator’Spot Bitcoin exchange-traded funds (ETFs) have logged outflows for ten consecutive trading days, with total net redemptions exceeding $2.97 billion since May 15, a streak that one analyst says may signal a market bottom is near.

According to data from SoSoValue, daily outflowsrangedfrom $70 million to $733 million across the period, with the steepest single-day exodus recorded on Wednesday at $733.43 million. Total net assets held across spot Bitcoin (BTC) ETFs have dropped from $104.29 billion on May 15 to $94.17 billion as of Friday, a decline of roughly $10 billion in two weeks.

The current streakbroke the previous recordof eight consecutive outflow sessions, which was recorded in early last year and saw $3.2 billion in withdrawals, on Thursday, before extending to 10 days on Friday.

Source: Santiment Intelligence

Spot Bitcoin ETFs have become a major gauge of institutional demand since their US launch. Large inflows have historically signaled growing optimism and increased demand, while heavy outflows reflect fear and de-risking.

CFTC gives green light to Bitcoin perpetual futuresThe CFTC approveda new Bitcoin perpetual futures contractfrom the prediction-markets platform Kalshi, marking a notable step forward for crypto derivatives in the US.

Unlike traditional futures contracts, perpetual futures don't have an expiration date and are designed to closely track the spot price of an asset. They're among the most popular trading products in global crypto markets but have faced regulatory hurdles in the United States.

In its approval order, the CFTC said Kalshi demonstrated that the contract complies with the Commodity Exchange Act and relevant regulations. The agency also suggested that crypto markets may be particularly well-suited to around-the-clock trading, clearing, and settlement — a potential sign that regulators are becoming more comfortable with market structures built for 24/7 digital assets.

Source:CFTC