ZachXBT Slams Circle’s Handling of Drift Hack
Circle issues the U.S. dollar stablecoin USDC and can blacklist addresses and freeze assets, while its Cross-Chain Transfer Protocol (CCTP) enables cross-chain USDC transfers. On-chain investigator ZachXBT questioned why Circle failed to intervene promptly in the hack despite having quickly frozen other wallets, accusing it of applying a double standard in enforcement.
Drift Protocol lost about $285 million on April 1, 2026. Within six hours, the attacker moved about $230 million in USDC through CCTP in more than 100 transactions. On April 3, ZachXBT accused Circle of failing to block more than $420 million in illicit funds since 2022. Investors filed a class-action lawsuit in federal court in Massachusetts on April 14.
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The history behind this eventDrift Hack Victims Sue Circle Over Failure to Freeze $280 Million in Stolen USDC
After Drift Protocol was hacked, about $280 million in assets was converted into USDC, prompting affected investors to file a class-action lawsuit against stablecoin issuer Circle. At the heart of the case is whether a centralized issuer has a duty to use its smart-contract powers to intercept proceeds from DeFi crimes, raising questions about the boundary between asset autonomy and victim protection.
As of July 20, 2026, the plaintiffs alleged that Circle knew the $280 million in USDC was suspected of being stolen but failed to freeze it during the critical six hours when the hacker moved the funds. Circle CEO Jeremy Allaire said the company freezes assets only at the direction of law enforcement, arguing that independently determining ownership could create legal and ethical risks.
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