Circle Hit With Class Action Lawsuit Over $285M Drift Protocol Hack

USDC issuer Circle has been deed with a class enactment lawsuit from Drift Protocol investors who mislaid wealth during the April 1 exploit that saw $285 cardinal drained from the the Solana DeFi platform.

The suit, filed connected April 14, accuses Circle Internet Financial of failing to frost stolen funds during the exploit.

The suit centers connected an eight-hour model during which attackers moved $232 cardinal successful USDC from Solana to Ethereum utilizing Circle's Cross-Chain Transfer Protocol. The hackers had exploited Drift Protocol done pre-signed administrative transfers utilizing "durable nonces," a morganatic Solana diagnostic they weaponized weeks earlier the April 1 attack.

Drift Protocol subsequently linked North Korean state-affiliated hackers to the attack, noting that they had infiltrated the institution implicit the people of six months by posing arsenic a quantitative trading firm.

The incidental prompted crisp disapproval of Circle from wrong the crypto community, with blockchain researcher ZachXBT accusing the steadfast of having been “asleep,” during the Drift exploit, adding, “Why should crypto businesses proceed to physique connected Circle erstwhile a task with 9 fig TVL could not get enactment during a large incident?”

Circle maintains it acted appropriately wrong ineligible constraints. "Circle is simply a regulated institution that complies with sanctions, instrumentality enforcement orders, and court-mandated requirements," a institution spokesperson said. Earlier this week, CEO Jeremy Allaire warned that unilateral freezing decisions extracurricular established ineligible processes could make a "significant motivation quandary."

Chief Strategy Officer Dante Disparte reinforced this presumption successful a blog, stating that, "when Circle freezes USDC, it is not due to the fact that we person decided, unilaterally oregon arbitrarily, that someone's assets should beryllium taken from them. It is due to the fact that the instrumentality requires america to act."

While Circle defended its position, Drift Protocol secured betterment commitments of up to $127.5 cardinal from Tether and $20 cardinal from different partners connected Thursday. Tether CEO Paolo Ardoino positioned his steadfast arsenic much responsive, stating that, "Tether’s relation successful the integer assets ecosystem is to supply a level for individuals and institutions alike that is acceptable to measurement guardant to assistance the manufacture successful the infinitesimal of darkness."

The ineligible enactment arrives amid broader concerns astir stablecoin issuers' responsibilities successful combating illicit finance. TRM Labs data shows astir $141 cardinal successful stablecoin transactions past twelvemonth were linked to illicit enactment including sanctions evasion and wealth laundering, portion ZachXBT has documented astir $420 cardinal successful suspicious USDC flows since 2022 that went unblocked.

Circle reported soaring USDC circulation and transaction measurement figures successful its Q4 2025 report, with Allaire claiming that the steadfast would turn successful tandem with the artificial quality industry, and "drive the top acceleration of economical enactment we've ever seen successful quality history."