Cryptocurrencies,  Security

Circle Sued Over Inaction on Drift Protocol Theft

Class-action lawsuit seeks $230 million from stablecoin issuer

By  / April 17, 2026 /

Stablecoin issuer Circle was widely criticized for allowing Drift Protocol hackers to steal $230 million in USDC tokens over the course of eight hours without acting to freeze the stolen funds. Now, it is being sued.

Law firm Gibbs Mura on Tuesday filed a $230 million suit against Circle for “knowingly permitting the attackers, reportedly tied to North Korea’s government, to offload $230 million of their spoils over the course of several hours by using Circle’s own stablecoin USDC and its blockchain bridge CCTP, instead of freezing the funds.”

It added, “Circle allegedly took no action to freeze the funds, despite having the technical and contractual authority to do so.”

In a press conference earlier this week, Circle CEO Jeremy Allaire said the firm freezes funds in response to requests from law enforcement or a court order, saying allowing a private company to freeze assets of its own volition creates a “moral quandary.”

Circle is the second-largest stablecoin issuer by market capitalization, with $79 billion extant. The largest stablecoin issuer, Tether, with a $186 billion market cap, quickly freezes its tokens in response to reports of hacks.

Circle has been harshly criticized for its stance, with well-known blockchain investigator ZachXBT accusing the company of letting some $420 million in illicit funds be moved without taking action to freeze them since 2022. That came two days after the April 1 Drift exploit.

What happened

The largest decentralized perpetual futures exchange on Solana, Drift Protocol has said that the exploit occurred after the attackers spent up to six months setting up the operation. There was no bug in its code or smart contracts, it said.

Instead, the attackers did two things. First, they set up durable nonce accounts — special transactions that do not expire after a few minutes, unlike most Solana transactions — over several weeks. Second, they obtained control of two multisig accounts, likely through social engineering, that allowed them to gain control of protocol-level permissions and remove all pre-set withdrawal limits.

This allowed them to drain $280 million worth of tokens, including $230 million in USDC.

Drift has announced that it received a $127.5 million investment from Tether, as well as $20 million from other partners, to back its relaunch. As a result, it will switch from a USDC-based perpetual futures exchange to a USDT-based one.

Circle told Modern Consensus that it does not comment on legal matters.

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Leo Jakobson, Modern Consensus editor-in-chief, is a New York-based journalist who has traveled the world writing about incentive travel. He has also covered consumer and employee engagement, small business, the East Coast side of the Internet boom and bust, and New York City crime, nightlife, and politics.