A class action lawsuit has been filed against Circle by investors from Drift Protocol, who suffered losses during an April 1 hack that resulted in $285 million being siphoned off the Solana DeFi platform. Filed on April 14, the suit charges Circle Internet Financial with neglecting to immobilize the stolen funds promptly.
During an eight-hour period post-exploit, attackers transferred $232 million worth of USDC from Solana to Ethereum via Circle’s Cross-Chain Transfer Protocol. The breach was facilitated by exploiting Drift Protocol through pre-signed administrative transactions using ‘durable nonces,’ a legitimate feature on Solana that the hackers manipulated in advance.
Drift Protocol has since implicated North Korean state-linked hackers, revealing that these adversaries had infiltrated the company over six months, disguising themselves as a quantitative trading firm. The crypto community criticized Circle sharply for its response to the Drift incident. Blockchain analyst ZachXBT remarked on Circle’s apparent inaction during the breach, questioning why crypto entities should continue collaborating with Circle given its lack of support during this significant event.
Circle has defended its actions, asserting compliance with legal requirements. “As a regulated entity, Circle adheres to sanctions, law enforcement directives, and court orders,” stated a company representative. Earlier in the week, CEO Jeremy Allaire cautioned that making unilateral decisions to freeze assets outside established legal frameworks could lead to severe ethical dilemmas.
Dante Disparte, Chief Strategy Officer at Circle, elaborated on this stance in a blog post, emphasizing that asset freezes are conducted under legal obligations rather than arbitrary decisions. Meanwhile, Drift Protocol announced recovery pledges amounting to $127.5 million from Tether and an additional $20 million from other partners on Thursday. Paolo Ardoino, CEO of Tether, highlighted his company’s responsiveness by stating its readiness to support the industry during crises.
The lawsuit emerges against a backdrop of growing concerns regarding stablecoin issuers’ roles in preventing illegal finance activities. TRM Labs data indicates that approximately $141 billion in stablecoin transactions last year were linked to illicit acts such as sanctions evasion and money laundering, while ZachXBT has reported around $420 million in suspicious USDC movements since 2022 that went unaddressed.
In its Q4 2025 report, Circle highlighted significant increases in USDC circulation and transaction volumes. CEO Jeremy Allaire expressed optimism about the firm’s growth alongside advancements in artificial intelligence, suggesting it could catalyze unprecedented economic activity.