Drift to Accept $148M From Tether, Drops USDC for USDT

Drift announced on April 16 that it will accept $127.5 million from Tether and $20 million from other partners to seed a roughly $148 million recovery pool for users affected by a recent exploit. The protocol also said it will stop using Circle’s USDC as its settlement coin when the exchange relaunches and will adopt Tether’s USDT.

The funding package combines committed support capital with a portion of the exchange’s revenue. Affected users will receive a transferable token representing a claim on the recovery pool. Tether’s contribution includes a revenue-linked credit facility, an ecosystem grant and loans to market makers, and the firm is expected to provide market-making resources for the relaunched platform.

Drift said the funds will be directed into the recovery pool in addition to ongoing revenue contributions. The protocol has been cooperating with law enforcement and blockchain investigators as it prepares a relaunch after the exploit.

Earlier this month attackers drained about $285 million from the Solana-based exchange. Drift attributed the theft to a North Korea-affiliated threat group that it says spent months compromising contributors using fabricated identities and malicious developer tools before executing the breach.

Large amounts of the stolen crypto were moved to Ethereum using Circle’s Cross-Chain Transfer Protocol. Some observers criticized Circle for not freezing assets after the transfers. A Circle executive wrote that the firm freezes assets only when legally required and does not act unilaterally to seize assets.

Tether CEO Paolo Ardoino wrote that the firm’s support focuses on ‘restoring user confidence and supporting a strong relaunch.’ Tether noted it works with 10 law enforcement agencies across 64 countries and has helped recover about $800 million in stolen crypto to date.

The U.S. Treasury recently urged Congress to consider a so-called hold law that would protect entities that temporarily hold digital assets suspected of illegal activity during short investigations. The Treasury also pointed to the GENIUS Act, enacted last year, which will require firms to build systems to combat money laundering and sanctions evasion.

Drift declined to provide a detailed relaunch timetable. The protocol wrote that the recovery plan and new funding arrangements are intended to return value to affected users while it completes security audits and updates to contributor procedures.