Drift Protocol Investors File Class Action Lawsuit Against Circle

Drift Protocol investors sue Circle over alleged negligence in hack.

Joshua McCollum, a victim of the Drift Protocol hack, along with over 100 others, filed a lawsuit against Circle in a Massachusetts court. The plaintiffs accused the issuer of the stablecoin of aiding hackers and negligence. 

According to the statement, the firm allowed cybercriminals to transfer approximately $230 million in USDC to the Ethereum network through the cross-chain protocol CCTP without hindrance. 

“Circle allowed criminals to use its technology. If the company had intervened in time, these losses could have been avoided or significantly reduced,” commented McCollum’s lawyers. 

The victims of the attack are demanding full compensation from the issuer, with the final amount to be determined by the court.

The lawyers pointed out that about a week before the Drift hack, Circle froze 16 addresses as part of a classified civil case in the United States. In their view, this precedent proves the firm’s technical ability to promptly freeze funds.

On-chain detective ZachXBT considers the issuer’s slow response to illegal operations involving USDC unacceptable. After the Drift hack, he reported at least 15 instances of the company’s inaction, costing victims $420 million. 

Circle’s Position and Community Reaction

Earlier, during a press conference, Circle CEO Jeremy Allaire defended the decision not to intervene in the situation. According to him, wallet blocking is carried out solely at the direction of law enforcement agencies.

Actions outside established legal procedures in private cases can create a “serious moral dilemma,” noted the head of the firm. 

“If someone believes that Circle should ignore the law and make its own decisions — that is a very risky position,” added Allaire.

ARK Invest’s Director of Digital Asset Research Lorenzo Valente supported the issuer. According to him, the company acted correctly: freezing funds without a court order opens the door to arbitrariness.

Ok, pretty much everyone is mad at @circle and @jerallaire for not freezing the ~$230M in USDC the @DriftProtocol hacker bridged from Solana to Ethereum after the $285M exploit. Let me steelman why it was actually the right call 🧵

1. “Code is not law, but law is not law… https://t.co/eKOXzCSMGz

— Lorenzo Valente (@LorenzoARK) April 16, 2026

“Every future freeze will be a subjective decision. Every refusal to do so — a political statement. Why freeze the Drift hacker but not that dubious Nigerian scam wallet? Why this protester and not that one?” he wrote. 

At the same time, the expert emphasized that the correctness of the decision “depends on the balance between the rule of law and specific harm.” Valente acknowledged that the funds stolen from Drift could go towards North Korea’s nuclear program. 

Meanwhile, Bloomberg analyst James Seyffart called Circle and its CEO’s arguments a “weak excuse.” 

I hope there’s some precedent set. Either you’re a decentralized protocol and literally do not have the power to freeze or you’re not and you should be freezing hacked funds. This middle ground hand wavy “only with a court order” stuff is weak. Misses the forest for the trees https://t.co/TqzOYKZOvm

— James Seyffart (@JSeyff) April 16, 2026

“I hope this sets a precedent. Either you are decentralized and cannot freeze funds, or you are not — and then you are obliged to do so. The ‘only by court order’ stance is a vague excuse that misses the point,” he noted. 

At the time of writing, Circle has not commented on the filing of the class action lawsuit. 

Back in April, Drift raised $148 million from Tether and other partners to recover from the hack.