Tether backs $150M recovery for Drift Protocol

Tether announced it will back a $150 million recovery program to restore funds for users of the Drift Protocol decentralized exchange following a roughly $280 million exploit in early April. The plan allocates $127.5 million from Tether and the remainder from undisclosed partners. Funding is structured to link recovery payments to ongoing trading activity on Drift, and the protocol will also contribute directly to rebuilding user balances as trading resumes.

Drift will relaunch using Tether’s USDt (USDT) as its settlement asset instead of Circle’s USDC. The platform plans to resume operations after completing technical and security checks.

The exploit in early April removed about $280 million in multiple crypto assets. Investigators reported the attacker moved more than $232 million in USDC from the Solana network to the Ethereum network using Circle’s Cross-Chain Transfer Protocol. Those transfers took place in over 100 transactions across several hours. Blockchain tracing firm Elliptic linked the attacker to North Korea.

Security researchers and industry participants criticized Circle for not freezing the USDC wallets tied to the exploiter while the transfers were occurring. The company’s shares fell about 10% on April 9 and later recovered.

The recovery arrangement combines partner funding, Drift’s own contributions and a mechanism that restores balances as trading activity returns. Similar revenue- or activity-linked proposals have been used in other large hacks to avoid a single large upfront payout and to allow platforms to resume normal operations while repaying users.

Tether did not immediately respond to requests for comment. Drift indicated it will bring the exchange back online with the new settlement asset once required technical and security checks are complete.