- The department was accused of failing to freeze transfers linked to the exploitation.
- Nearly $230 million of the stolen funds were routed through Circle’s USDC.
- Drift plans to recover $147.5 million supported by future revenue.
Circle Internet Group, the issuer of the USDC stablecoin, is facing a class action lawsuit over its alleged failure to stop the movement of stolen funds linked to the Drift protocol exploit.
suit, It was filed by Drift investor Joshua McCollum in US District Court in Massachusetts On behalf of more than 100 affected users, the focus is on whether the company has the capacity and commitment to intervene while the exploit unfolds.
The lawsuit targets Circle’s role in transferring the money
The legal action stems from the April 2026 breach of Drift Protocol, a Solana-based decentralized exchange, where attackers drained approximately $285 million.
Much of this money, estimated at $230 million, was quickly converted into USDC.
From there, the funds were moved cross-chain, primarily from Solana to… EthereumUsing cross-chain infrastructure.
The transfers were not immediate. It occurred over the course of several hours and was divided into more than 100 transactions.
These details lie at the heart of the lawsuit.
Prosecutors argue that the department had an opportunity to act.
According to the claim, the company could have frozen the affected wallets or stopped transfers, thus limiting the damage. Instead, the money kept moving until it was completely out of reach.
The case accuses Circle of negligence and indirectly facilitating the loss by failing to act despite having the technical capacity to do so.
This argument is reinforced by previous cases where a company has frozen wallets linked to illicit activity, demonstrating that such intervention is not only possible, but is already part of its operational toolkit.
At its core, the lawsuit raises a difficult question: When a central entity operates within a decentralized system, where does its responsibility begin and end?
Drift recovery plan
In response to this exploit, Drift Protocol has put in place a structured recovery plan aimed at addressing user losses while rebuilding the platform’s liquidity and operations.
The protocol seeks to mobilize up to $147.5 millionwith a large portion supported by Tether and other ecosystem partners.
However, this number should not be viewed as an immediate compensation.
A significant share of the financing comes in the form of revenue-linked credit facilities estimated at approximately $100 million.
This means that the protocol will withdraw funds over time and pay them back using future trading fees and platform revenues rather than distributing the full amount up front.
To manage user claims, Drift plans to release a new redemption token, although its official name and final structure have yet to be confirmed.
This token will be distributed to affected users and will represent their stake in the redemption pool.
It is expected to be transferable, allowing users to either hold it and wait for gradual repayment or sell it on secondary markets for immediate liquidity, likely at a discount.
The recovery complex itself will not depend solely on external financing.
It is designed to be continuously replenished through multiple sources, including protocol revenue, partner contributions, and any funds that may be recovered from attackers.
This creates a system where reimbursements are directly linked to the platform’s ability to restart operations and generate consistent trading activity.
Despite these measures, a clear deficit remains.
With total losses estimated at around US$285 million and recovery efforts targeting up to US$150 million, a significant portion of user funds were not immediately covered.
This gap highlights that users are unlikely to be fully compensated in the near term, and recovery will depend heavily on Drift’s long-term performance.
To support the relaunch, part of the recovery framework also focuses on restoring liquidity.
Incentives and financial support are directed towards market makers to rebuild order books and improve trading conditions once the platform resumes full operations.
Without sufficient liquidity, even a technically sound relaunch will have difficulty attracting users again.
Another major shift is the protocol’s decision to move away from USDC as the primary settlement asset and adopt USDT instead.
This change comes after approximately $230 million in stolen funds were converted to USDC and moved cross-chain during the exploit.
This switch signals a reassessment of risks and reflects a broader effort to restructure the platform’s underlying infrastructure in the wake of the incident.
In general, Drift’s recovery plan is based on gradual compensation rather than immediate payment.
Its success will depend on how quickly the platform regains user confidence, restores liquidity, and generates enough revenue to support repayment over the long term.
