- $147.5M funding package led by Tether and partners to support recovery
- USDT replaces USDC as Drift’s settlement layer
- $270M exploit linked to North Korea targeted the protocol
- Recovery pool aims to cover ~$295M in user losses over time
- DRIFT token down 70% since the exploit
Funding Package and Platform Relaunch: Drift Protocol has secured a proposed funding package of up to $147.5 million following its April 1 exploit. The deal includes up to $127.5 million from Tether and an additional $20 million from partner entities.
The funding is structured to support user recovery efforts and enable the relaunch of Drift as a USDT-based perpetual futures exchange on Solana. The platform previously used Circle’s USDC as its settlement layer. The rescue package combines a revenue-linked credit facility, ecosystem grants, and loans to market makers. A portion of trading revenue, along with committed capital, will be allocated to a recovery pool designed to cover approximately $295 million in user losses over time.
Exploit Details and Market Impact
The funding follows a major exploit carried out by a North Korea-linked group. The attackers reportedly infiltrated Drift Protocol by posing as a quantitative trading firm for about six months before executing the attack. The exploit, which exceeded $270 million, occurred on April 1. Following the incident, Drift’s governance token, DRIFT, declined by around 70%. During the attack, approximately $232 million in USDC was moved from Solana to Ethereum using Circle’s cross-chain transfer protocol.
Stablecoin Shift and Industry Response
Drift’s transition to USDT places the stablecoin at the center of its trading infrastructure. The move is intended to support platform recovery and operational continuity. Circle faced criticism from parts of the crypto community for not halting transfers during the exploit. Some observers stated that faster action to blacklist wallets and freeze funds could have slowed asset movement.
Circle CEO Jeremy Allaire stated that the company freezes USDC wallets only when directed by law enforcement or courts, citing legal considerations. This approach reflects its alignment with regulatory and institutional frameworks. In contrast, USDT has previously been used to freeze assets linked to illicit activities, including hacks. Drift, founded in 2021, is a decentralized perpetual futures exchange on Solana with over 175,000 users and approximately $150 billion in cumulative trading volume. The platform offers perpetual trading, spot markets, lending, borrowing, and cross-margin trading.
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