Circle, the issuer of the USDC stablecoin, is facing a lawsuit in Massachusetts related to the $280 million hack of the Solana-based decentralized exchange Drift Protocol on April 1. The complaint, filed by plaintiffs represented by law firm Gibbs Mura, alleges that Circle failed to freeze the stolen funds despite having both the technical capability and contractual authority to do so.
The attackers drained an estimated $280–$285 million from Drift in under 12 minutes. The stolen assets were then moved from Solana to Ethereum over roughly eight hours using Circle’s Cross-Chain Transfer Protocol (CCTP). Plaintiffs highlight that this transfer occurred during US business hours, arguing Circle should have intervened. The hack caused Drift's total value locked to plummet from about $550 million to under $250 million, and the platform suspended deposits and withdrawals indefinitely. The lawsuit claims the fallout extended to at least 20 other DeFi protocols that reported indirect losses.
The plaintiffs point to a separate incident where Circle froze 16 unrelated business wallets nine days prior as evidence of its capability and willingness to act. They allege Circle's inaction allowed attackers to offload up to $230 million onto Ethereum.
In a related development, Drift Protocol has unveiled a $147.5 million recovery plan backed by Tether and other partners. The plan focuses on compensating users for their losses. As a key strategic shift, Drift will replace USDC with USDT as its primary settlement layer upon relaunch. The platform is working to address nearly $296 million in stolen assets and will issue recovery tokens to users linked to future payouts.
