Circle Faces Class Action Over $280 Million Drift Protocol Hack
- A class action lawsuit was filed in Massachusetts on behalf of investors from the Drift Protocol.
- The lawsuit alleges that Circle failed to freeze over $230 million in stolen USDC, despite having the capability to do so.
- Attackers linked to North Korea used Circle’s Cross-Chain Transfer Protocol (CCTP) to move stolen funds across networks.
- Circle’s CRCL stock fell by approximately 1.42% in after-hours trading following the lawsuit announcement, erasing gains made earlier in the day.
- Drift Protocol is shifting its core settlement asset from USDC to USDT as part of a recovery plan worth $150 million.
The class action highlights concerns over Circle’s response during a critical window when stolen assets could have been frozen, raising questions about stablecoin issuer responsibilities. CEO Jeremy Allaire emphasized that freezing assets requires law enforcement direction to avoid legal risks.
Following the hack and subsequent lawsuit, Circle’s CRCL stock price has seen fluctuations, reflecting investor uncertainty amid ongoing legal challenges and operational changes at Drift Protocol. (Source)
