Drift Protocol Ditches Circle's USDC For USDT After $280M Hack, Unveils $150M Recovery Plan

• Drift Protocol said it will move its settlement layer from USDC to USDT after the platform was hacked in a $280 million exploit earlier this month.
• The project is working with Tether and partners on a $150 million recovery package to relaunch the platform and compensate users.
• The package includes a $100 million revenue-linked credit facility, along with ecosystem grants and loans to market makers, the company said.

Drift Protocol (DRIFT), the trading platform that was hacked for $280 million earlier this month, announced that it’s going to move its settlement layer from Circle’s (CRCL) USDC stablecoin (USDC) to Tether (USDT) in its plan for recovery. 

In its user recovery update, the Solana (SOL)-based project said it is collaborating with Tether and other partners in a $150 million recovery plan to a relaunch with USDT at the center and compensate users that were impacted by the $280 million exploit.

Under the proposal, Tether would contribute up to $127.5 million, while other partners are expected to provide around $20 million. The package includes a $100 million revenue-linked credit facility, along with ecosystem grants and loans to market makers, the company said.

DRIFT Token Recovers Nearly 100% From Record Low

DRIFT’s price shot up by over 18% in the last 24 hours to around $0.50, getting close to breaking even since the April 1 hack. The token hit an all time low of $0.20 on April 10, and has gained over 95% since then. 

Retail sentiment around the DRIFT token on Stocktwits rose to ‘bullish’ from ‘neutral’ territory over the past day, accompanied by chatter at ‘normal’ levels. Retail sentiment around USDC trended in ‘neutral’ territory over the past day, while retail sentiment around USDT surged to ‘extremely bullish’ from ‘bullish’ territory. 

Circle Faces Questions Over Response Timing

Circle man under scrutiny from the cryptocurrency community for not taking timely action against the hack that could have prevented the funds from being stolen. According to on-chain investigator ZachXBT, Circle could have frozen the funds in the time the hacker took to steal $280 million from Drift, moving it from Solana (SOL) to Ethereum (ETH) via the firm’s cross-chain transfer protocol.  

Earlier this week, Circle CEO Jeremy Allaire said the company does not get to decide "what is the right path or not," resulting in a "moral quandary" for a private company if it gets to make such decisions. 

CRCL’s stock edged 0.8% higher in midday trade on Thursday. Retail sentiment around the company trended in ‘neutral’ territory over the past day. 

Read also: Arthur Hayes Calls Market A ‘No Trade Zone’ Amid US-Iran Tensions – Maps Out Four War Outcomes For Bitcoin

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