Drift Protocol announced today that it would deploy a structured recovery plan supported by close to $150 million from Tether and other entities. The news comes a couple of weeks after Drift Protocol was hit with a major $280M exploit, in one of the most devastating exploits in DeFi history. Drift receives $150M for recovery plan According to Drift Protocol, since the exploit, the team has been engaged in parallel workstreams, working hand-in-hand with law enforcement and third-party forensics firms to investigate the exploit, design a robust framework for full user recovery, and structure a more secure platform for relaunch. The plan Drift announced was reportedly drafted with help from Tether and partners and will not rely on upfront capital alone. The structure reportedly links funding and recovery to ongoing trading activity happening on the Drift platform, which will allow user balances to be restored as the exchange returns to normal operations. As activity resumes fully, the exchange revenue will also be used to aid user recovery and support the platform’s ability to operate and scale. Capital support will reportedly be introduced progressively and can be expected to align with performance, connecting the recovery to actual platform usage. Tether becomes part of Drift’s future According to an official release from Tether, the strategic collaboration with Drift Protocol puts forward a structured recovery plan backed by about $150 million in combined support, with about $127.5 million coming from Tether. “We told our community we would find a path to recovery. This is that path. This is the first step toward making users whole over time and toward building back stronger than where we were before,” Drift posted on X . As part of the deal and relaunch, Drift will have to pivot away from Circle’s USDC as the core stablecoin on the platform. Instead, it will now use Tether’s USDT, meaning that its 128,000 users and over 35 ecosystem teams will switch to USDT-based trading. This effectively limits its exposure to USDC in its operations and liquidity layout while positioning USDT as a primary settlement asset on what is regarded as one of Solana’s largest perpetual trading venues. Circle lost Drift and is facing backlash The Drift exploit sparked criticism toward Circle, the USDC deployer. Shortly after the hack, famous crypto sleuth ZachXBT took to X with a lengthy thread , pointing out some interesting facts. One was how the attackers chose to bridge millions in stolen USDC from Solana to Ethereum using Circle’s Cross-Chain Transfer Protocol (CCTP). The bridging occurred across 100s of transactions, and there was a 6-hour window during US business hours that Circle could have intervened. The spark Zach lit quickly grew into a flame on Crypto Twitter as users started asking questions, like why a protocol like Drift, with its nine-figure TVL, received no support or rapid intervention from Circle during the crisis. Circle’s Chief Strategy Officer, Dante Disparte, responded to the backlash. According to Disparte, Circle does not freeze assets on its own discretion, and they only occur under legal compulsion to comply with regulations and protect user rights. Disparte claimed that acting without proper authorization could put the company in hot regulatory waters and called for the passage of the GENIUS and CLARITY so they can provide the needed legal framework it says it needs to act. The Circle CSO also called for shared accountability where security is concerned, framing it as a better alternative to relying solely on issuers to act as onchain police. The crypto card with no spending limits. Get 3% cashback and instant mobile payments. Claim your Ether.fi card.
