Drift Protocol investor Joshua McCallum filed a class-action lawsuit against Circle in federal court in Massachusetts on behalf of over 100 affected individuals. The essence of the accusation: Circle did not freeze funds after the Drift hack on April 1 and allowed attackers to transfer about $230 million in USDC from Solana to Ethereum through its own CCTP protocol within a few hours.
"Circle allowed the criminal use of its technologies. These losses would not have occurred or would have been significantly less if Circle had acted promptly," the lawsuit states. Circle is accused of aiding theft and negligence.
The plaintiffs point out that a week before the hack, Circle froze 16 wallets as part of another civil case, indicating that the company had the technical capability to intervene. Elliptic analysts linked the hack to North Korean hackers, who conducted over 100 transactions through CCTP during US business hours. The funds were then converted into ETH and laundered through Tornado Cash.
Circle's position was defended by ARK Invest's director of digital assets, Lorenzo Valente, stating that freezing without a court order opens the door to arbitrary decisions. According to him, the stolen funds will likely go to fund North Korea's nuclear program.
While Circle deals with the lawsuit, Tether seized the moment: the company allocated $127.5 million to Drift for recovery and simultaneously ousted the competitor - Drift is migrating from USDC to USDT as the main settlement layer.