Circle sued over failure to freeze $230M USDC after Drift hack

Circle is facing a class-action lawsuit that accuses the company of failing to freeze roughly $230 million in USDC stolen in the April 1 Drift Protocol exploit and later moved from Solana to Ethereum using Circle’s Cross-Chain Transfer Protocol (CCTP), the complaint says.

The complaint was filed April 14 by Gibbs Mura, A Law Group. It focuses on the actions taken after the breach rather than how attackers accessed Drift. The plaintiffs allege the attackers, reportedly tied to North Korea’s government, offloaded about $230 million across more than 100 transactions over eight hours and that Circle had the technical and contractual ability to intervene.

Drift, a decentralized exchange on Solana, was breached after attackers executed pre-signed administrative transactions that had been prepared weeks earlier. The complaint says the breach followed the removal of a timelock safeguard and allowed attackers to seize governance control and drain about $286 million in minutes. Investigators flagged use of fake collateral, durable nonce accounts, and social engineering against protocol signers. Drift’s total value locked fell from about $550 million to under $250 million and at least 20 other DeFi protocols reported indirect losses. The DRIFT token lost more than 40% of its value.

Circle addressed the incident on April 10, saying freezes of USDC are governed by law and require legal authority. In a public statement, Circle wrote: “When Circle freezes USDC, it is not because we have decided, unilaterally or arbitrarily, that someone’s assets should be taken from them. It is because the law requires us to act.” The company added that USDC operates within regulatory frameworks and that faster, coordinated responses would require changes to legal structures rather than unilateral action by issuers.

Following the exploit, Tether announced a $150 million support plan intended to stabilize markets after Drift’s collapse.

The lawsuit seeks damages and relief related to the alleged failure to block the transfers. The case is at an early stage and the allegations have not been tested in court.