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Home/Markets & Investing/TETHER USDT · STABLECOIN US LEGISLATION

Tether replaces USDC as Drift Protocol settlement layer after Circle refuses to freeze stolen funds

JR

Juniper Ravenscroft

Tether USDT · Apr 18, 2026

Tether replaces USDC as Drift Protocol settlement layer after Circle refuses to freeze stolen funds

Source: DojiDoji Data Terminal

Drift Protocol users will receive transferable recovery tokens representing claims on a recovery pool to repay approximately $295 million in total user losses. The pool is funded by a $127.5 million commitment from Tether and $20 million from partner ecosystem funds. This restitution follows an April 1 exploit in which North Korean hackers stole $285 million from the Solana-based derivatives exchange.

Related Brief3d ago
tax law

The PARITY Act would eliminate capital gains taxes on regulated stablecoin payments

Sellers of regulated stablecoin payments would recognize no gain or loss under the new draft of the Digital Asset PARITY Act. The bipartisan proposal, led by Representatives Steven Horsford and Max Miller, would treat routine spending with dollar-pegged stablecoins as non-taxable events. To qualify, a stablecoin must be issued by an authorized entity and maintain its peg within 1% for at least 95% of trading days over the prior 12 months. The bill would deem the taxpayer's basis to be $1 per unit, ignoring fluctuations within a $0.99 to $1.01 band. This shift would align regulated payment stablecoins with foreign currency rules. Current IRS guidance classifies stablecoins as digital assets taxed as property, meaning every use of USDC or USDT to buy goods triggers a reportable capital gain or loss event.

Attackers spent six months infiltrating internal networks by posing as a quant trading company and depositing over $1 million to establish trust. After the exploit, attackers bridged $230 million in USDC from USDC from Solana to Ethereum using Circle's Cross-Chain Transfer Protocol. Circle refused to freeze the funds, citing a policy of only acting on court orders or law enforcement instructions. Circle CEO Jeremy Allaire described unilateral freezes as a "moral quandary" and a risky proposition.

Related Brief5h ago
stablecoins

Circle Faces Liability Questions After $230M in Stolen USDC Moved Without Intervention

Investors are questioning Circle’s operational safeguards after the company allegedly allowed over $230 million in stolen USDC to move across blockchains without intervention. The funds were taken during the April 1 hack of Drift Protocol, a Solana-based decentralized exchange, where attackers gained control through pre-signed administrative transactions and drained assets. Circle’s cross-chain transfer system was used to shift the stolen stablecoins from Solana to Ethereum in more than 100 transactions over several hours. According to a class action lawsuit filed April 14, Circle had both the technical ability and contractual authority to freeze the funds but did not do so. That inaction forms the core of the legal claim, which could expose the company to financial liability and reputational harm if courts determine it failed in its duty to prevent illicit flows. Premarket trading reflected the concern: CRCL stock dipped 1%, reversing part of a previous 1.84% gain. The breach, estimated at $280 million, ranks among the largest in 2026 and has already triggered indirect losses across other DeFi platforms. Drift Protocol’s total value locked fell from $550 million to under $250 million, and its native token shed more than 40% of its value. The incident spotlights a broader issue: whether stablecoin issuers like Circle are responsible for policing how their tokens are used post-issuance. Prior incidents cited by the plaintiffs suggest a pattern that could compound regulatory and investor scrutiny. With USDC remaining a cornerstone of cross-chain liquidity, the outcome of this case may shape expectations for oversight in the stablecoin sector. The DRIFT token lost more than 40% of its value following the attack.

This inaction triggered a class-action lawsuit filed on April 14 in the U.S. District Court in the U.S. District Court in Massachusetts, led by investor Joshua McCollum, who lost $23,500. As a condition of the relaunch, Drift Protocol shifted its settlement asset from USDC to USDT. The transition moved 128,000 users and 35 ecosystem teams onto USDT-based trading. Tether provided up to $127.5 million in support via revenue-linked credit facilities and ecosystem grants, while also providing market-making support to keep order books deep.

Related Brief17h ago
cybersecurity

Grinex Hack Erases $13.7 Million in Ruble-Backed Assets

Users of the Grinex cryptocurrency exchange are locked out of their accounts and funds. All trading, deposits, and withdrawals have been suspended indefinitely. The suspension follows a cyberattack that drained more than 1 billion Russian rubles, approximately $13.7 million, from 54 wallet addresses. Blockchain analytics firms Elliptic and TRM Labs tracked approximately $15 million in USDT leaving Grinex-linked accounts. To prevent Tether from freezing the stolen stablecoins, the attackers routed funds through the Tron and Ethereum networks and converted the USDT into TRX and ETH. The stolen assets were consolidated into a single wallet holding 45.9 million TRX, valued at approximately $15 million. Grinex, a Kyrgyzstan-registered exchange tied to Russia's domestic crypto-ruble ecosystem, attributed the breach to "foreign special services" and "foreign intelligence agencies." The platform is the successor to Garantex, a Moscow-based exchange sanctioned by the U.S. Treasury in 2022 for processing over $150 million in ransomware payments. After Garantex ceased operations in March 2025, liquidity and users migrated to Grinex, which other sources describe as a primary hub for the ruble-backed stablecoin A7A5, which Elliptic estimates has processed more than $100 billion in transactions. Two wallets linked to TokenSpot, another Kyrgyzstan-based exchange, transferred roughly $5,000 to the same consolidation address used in the Grinex heist.

Tether USDTstablecoin US legislationstablecoin regulationDeFi exploitcrypto exchange hackcrypto IRS rulingcrypto money laundering enforcementCharles SchwabRobinhoodFed interest rate decision

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