Tether replaces USDC as Drift Protocol's settlement layer after $280 million exploit
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Orion Holloway
Tether USDT · Apr 17, 2026
Source: DojiDoji Data Terminal
Drift Protocol's governance token fell 70% in value after a $280 million exploit on April 1. The attack was executed by North Korean hackers who had spent six months posing as a quantitative trading firm to gain access to the platform.
Following the exploit, hackers transferred $232 million in USDC from Solana to Ethereum using Circle's Cross-Chain Transfer Protocol. Blockchain investigator ZachXBT noted that Circle had a six-hour window to freeze the funds but did not act. Circle CEO Jeremy Allaire stated the company only freezes wallets when directed by law enforcement or courts to avoid legal risk.
To facilitate recovery, Tether is leading a $147.5 million recovery package. Tether is contributing $127.5 million, with $20 million coming from undisclosed partners. The funding is structured as a revenue-linked credit facility, using a portion of Drift's trading revenue to flow into a recovery pool to repay approximately $295 million in total user losses.
As part of the deal, Drift will replace Circle's USDC with Tether's USDT as its core settlement layer. Tether will also provide fee reductions and liquidity support to market makers when the platform relaunches.
Tether USDT
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