A new class-action lawsuit is putting Circle squarely in the spotlight after roughly $230 million in stolen USDC moved across chains in the wake of the April 1 Drift Protocol exploit.
What’s being alleged
In a complaint filed in U.S. District Court in Massachusetts, Drift investor Joshua McCollum — representing more than 100 affected users — says Circle failed to stop the post-hack movement of about $230 million in USDC. The suit claims attackers routed funds across chains using Circle’s Cross-Chain Transfer Protocol (CCTP) over several hours, allowing the perpetrators to reposition assets “without disruption.” Lawyers for the plaintiffs, led by Mira Gibb, assert that timely intervention from Circle could have prevented or substantially reduced the losses. The complaint brings counts including negligence and aiding and abetting conversion; damages will be decided at trial.
Precedent and capability questions
Plaintiffs point to an action by Circle roughly a week before the Drift incident — when the firm froze 16 USDC-linked wallets tied to a sealed civil case — as proof the company had both the technical capability and operational precedent to act. That contrast is central to the suit’s contention that Circle “permitted this criminal use of its technology and services.”
The Drift exploit and on-chain trail
The legal dispute traces to a large-scale exploit of Drift, a Solana-based trading protocol, in which attackers drained more than $285 million — over half of the platform’s total value locked (TVL) at the time. DeFiLlama data cited in reports show Drift’s TVL has since fallen to around $251 million from a $1.5 billion peak recorded in September 2025.
On-chain investigators say the attacker rapidly converted stolen assets into stablecoins including USDC, bridged portions to Ethereum, swapped some into Ether, and routed proceeds through privacy tools such as Tornado Cash. Blockchain analytics firm Elliptic linked the movement to suspected North Korean state-backed actors and noted that more than 100 transactions passed through Circle’s infrastructure during U.S. working hours.
Immediate response and community reaction
Drift confirmed the attack as it was unfolding, pausing deposits and withdrawals and engaging security firms and exchanges. The team warned users not to interact with the protocol and security researchers urged revoking wallet approvals and avoiding the platform until it was safe.
The broader freeze debate
The case revives a perennial question in crypto: how much responsibility do stablecoin issuers carry when they retain the technical ability to freeze tokens at the contract level? Circle and other issuers face a trade-off — freezing assets can curb immediate criminal activity but acting without legal orders risks regulatory pushback and reputational damage. Lorenzo Valente, director of digital asset research at ARK Invest, summed up the dilemma: every freeze is a judgment call and every non-freeze can be taken as a political statement. “Whether Circle got it right comes down to how much you weigh rule-of-law principles vs concrete harm. Reasonable people disagree,” he said.
Drift’s recovery playbook and market signals
In the wake of the exploit, Drift has pivoted away from reliance on Circle’s infrastructure. The protocol has secured nearly $150 million in fresh backing to fund recovery and relaunch plans, including $127.5 million from Tether. The money is earmarked for compensating affected users and shifting settlement to USDT on Solana. The recovery roadmap includes a revenue-backed credit line, liquidity support for market makers, ecosystem grants, and a recovery token that will let affected users claim from a pool supported by trading fees and the newly raised capital.
Tether CEO Paolo Ardoino said the objective is to restore stability and rebuild trust with a relaunch “aligned with real activity and long-term growth.”
Market reaction has been swift: DRIFT token prices climbed roughly 20% to above $0.061 — its highest level since the day of the exploit — as investors priced in the recovery funding and relaunch prospects.
What’s next
The class action will test legal expectations around issuer intervention in the aftermath of hacks and may influence future industry practice on when and how stablecoin issuers exercise freezing powers. Meanwhile, Drift’s recovery plans and Tether’s sizable backing will be watched closely as the protocol attempts to rebuild liquidity and user confidence.
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