Critics: Circle Failed to Block Drift Hack Transfer

Stablecoin issuer Circle is under fire from critics who say the company could have moved faster to freeze funds that were stolen from crypto protocol Drift, CoinDesk reported Friday (April 3).

During the Drift hack, the attacker used Circle’s cross-chain transfer protocol to move about $232 million in USDC from Solana to Ethereum, according to the report.

Critics, including blockchain investigator ZachXBT, said Circle could have acted faster to limit Drift’s losses, the report said.

However, others said that Circle could face legal risk if it were to do so without a court order or law enforcement request, per the report.

A Circle spokesperson told CoinDesk: “Circle is a regulated company that complies with sanctions, law enforcement orders, and court-mandated requirements. We freeze assets when legally required, consistent with the rule of law and with strong protections for user rights and privacy.”

Drift, a crypto exchange that offers perpetual futures on the Solana blockchain, said Wednesday (April 1) post on X that it was experiencing an active attack and had suspended deposits and withdrawals.

As of late Friday, that post was still pinned atop Drift’s posts on X. In addition, a banner across the top of the company’s website said: “Drift is being paused until further notice due to irregular activity in the protocol.”

In a series of Wednesday posts on X, Drift said that it was working to contain the incident, that a malicious actor gained unauthorized access to Drift Protocol and took over Drift’s Security Council administrative powers in “a highly sophisticated operation,” and that the attack also involved the “compromise of multiple multisig signers’ approvals, likely through targeted social engineering or transaction misrepresentation.”

Drift posted on X late Thursday (April 2) that it had information about parties related to the exploit and was sending an on-chain message to the wallets that hold the stolen funds.

“To the community, Drift will share further updates as soon as third-party attributions are completed,” the company said in the post.

The Financial Times reported Thursday that Drift is the largest perpetual futures exchange on the Solana blockchain and that the hackers who attacked Drift stole $280 million from the exchange.

Bloomberg reported Wednesday that the amount of cryptocurrencies involved, as determined by blockchain data analysts, could make this one of the biggest hacks in crypto’s history.