In a recent statement, Drift Protocol announced its collaboration with Tether to bolster recovery efforts following a cyber-attack that resulted in the loss of $285 million worth of cryptocurrency. The decentralized exchange has revealed plans to receive financial support amounting to $127.5 million from Tether and an additional $20 million from other partners. This package will incorporate a revenue-linked credit facility, an ecosystem grant, and loans designated for market makers.
As part of this initiative, Drift Protocol intends to channel the allocated funds into a dedicated recovery pool, augmented by the exchange’s earnings. Users affected by the exploit will be issued transferable tokens representing claims on this recovery pool, as per Drift’s announcement.
In line with these developments, Drift has decided to phase out Circle’s USDC stablecoin upon relaunching its platform. Instead, it will adopt Tether’s flagship USDT stablecoin as a principal settlement medium. The El Salvador-based firm behind Tether is also anticipated to supply market-making resources.
The first stage of this partnership involves channeling significant portions of the exchange’s revenue and committed support capital into the user recovery pool. Drift has been collaborating with law enforcement agencies and blockchain experts in these efforts, as noted by Drift on April 16, 2026.
Paolo Ardoino, CEO of Tether, highlighted that their collaboration with Drift aims to “restore user confidence and support a robust relaunch.” Despite Tether’s USDT being occasionally criticized for its association with illicit activities, the firm pointed out in a blog post its collaboration with law enforcement agencies across 64 countries, leading to the recovery of $800 million in stolen cryptocurrency.
Following the exploitation of Drift’s Solana-based platform by hackers linked to North Korea two weeks prior, significant quantities of digital assets were transferred to Ethereum through Circle’s Cross-Chain Transfer Protocol (CCTP), a process spanning several hours. The fact that Circle did not intervene to freeze these funds resulted in online criticism, including accusations from blockchain analyst ZachXBT on X against the company for its passive response.
A Circle executive clarified in a blog post last week that asset freezing occurs only when mandated by law, rather than through unilateral decisions. Meanwhile, Dante Disparte, Circle’s Chief Strategy Officer and Global Policy Head, viewed the U.S. Treasury Department’s implementation of the GENIUS Act—a federal framework introduced last year—as a positive development.
The Treasury has recently proposed that under the GENIUS Act, firms like Circle must develop systems to prevent money laundering and sanctions evasion. While this proposal was announced, it did not mention the “hold law” previously suggested by the agency in its report, which would provide legal protections for entities temporarily holding digital assets suspected of being involved in illegal activities during investigations.