Circle Faces Legal Action Over $285M Drift Protocol Hack
- Stablecoin issuer Circle is facing a class action lawsuit from investors of Drift Protocol following a $285 million exploit.
- The lawsuit claims Circle failed to freeze $232 million in stolen USDC moved from Solana to Ethereum using its Cross-Chain Transfer Protocol.
- Drift Protocol linked the attack to North Korean state-affiliated hackers who infiltrated the company over six months.
- Circle defended its actions, stating it only freezes assets when legally mandated, while Tether committed up to $127.5 million for recovery efforts.
- Blockchain investigator ZachXBT criticized Circle’s response during the incident, questioning its support for projects with significant total value locked (TVL).
The legal action against Circle highlights concerns about stablecoin issuers’ responsibilities in combating illicit finance within the DeFi space.
Despite criticism, Circle maintains that it acted within legal constraints, emphasizing that asset freezing occurs only under court-mandated requirements, while Tether has taken proactive steps in addressing the aftermath of the hack.(Source)
