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Circle Hit With Class Action Lawsuit Over $285M Drift Protocol Hack
TL;DR
Circle is facing a class action lawsuit from Drift Protocol investors after a $285 million exploit of the DeFi platform. The lawsuit claims Circle failed to freeze stolen USDC during the attack, which involved moving funds through its cross-chain infrastructure.
Key points
- Circle faces a class action lawsuit from Drift Protocol investors
- The lawsuit claims Circle failed to freeze stolen funds
- Hackers exploited Drift Protocol to steal $285 million
- Attackers moved $232 million in USDC using Circle's infrastructure
- The lawsuit was filed on April 14, 2023
Mentioned in this story
Circle Internet FinancialDrift ProtocolSolanaEthereum
In brief
- Stablecoin issuer Circle is facing a class action lawsuit from Drift Protocol investors who lost money in a recent $280 million exploit of the DeFi protocol.
- The suit targets Circle's handling of the exploit, alleging that hackers moved stolen USDC through the firm’s own cross-chain infrastructure.
- Circle has defended its actions, saying it only freezes assets when legally mandated to do so.
USDC issuer Circle has been hit with a class action lawsuit from Drift Protocol investors who lost money during the April 1 exploit that saw $285 million drained from the the Solana DeFi platform.
The suit, filed on April 14, accuses Circle Internet Financial of failing to freeze stolen funds during the exploit.
The lawsuit centers on an eight-hour window during which attackers moved $232 million in USDC from Solana to Ethereum using Circle's Cross-Chain Transfer Protocol. The hackers had exploited Drift Protocol through pre-signed administrative transfers using "durable nonces," a legitimate Solana feature they weaponized weeks before the April 1 attack.
Drift Protocol subsequently linked North Korean state-affiliated hackers to the attack, noting that they had infiltrated the company over the course of six months by posing as a quantitative trading firm.
The incident prompted sharp criticism of Circle from within the crypto community, with blockchain investigator ZachXBT accusing the firm of having been “asleep,” during the Drift exploit, adding, “Why should crypto businesses continue to build on Circle when a project with 9 fig TVL could not get support during a major incident?”
Q&A
What is the class action lawsuit against Circle about?
The lawsuit accuses Circle of failing to freeze stolen funds during the $285 million exploit of the Drift Protocol.
How much money was stolen in the Drift Protocol hack?
The Drift Protocol hack resulted in the theft of $285 million.
What role did Circle's Cross-Chain Transfer Protocol play in the hack?
Hackers moved $232 million in USDC from Solana to Ethereum using Circle's Cross-Chain Transfer Protocol during the exploit.
When was the class action lawsuit against Circle filed?
The class action lawsuit was filed on April 14, shortly after the exploit on April 1.
