Circle Internet Group is in legal hot water. A proposed class action lawsuit, filed Wednesday in a US district court in Massachusetts, claims the stablecoin issuer stood by while attackers moved roughly $230 million in USDC following one of the biggest crypto heists of the year.
The hack hit Drift Protocol on April 1, draining an estimated $280 million from the decentralized finance platform. What followed — according to the lawsuit — was a multi-hour window during which Circle allegedly watched the funds move across blockchains and did nothing.
Lead plaintiff Joshua McCollum, a Drift investor, filed the suit on behalf of more than 100 members. The complaint accuses Circle of negligence and aiding and abetting the unlawful conversion of the stolen funds.
The attackers used Circle’s own Cross-Chain Transfer Protocol to bridge the stolen USDC from Solana to Ethereum. The lawsuit argues Circle had both the technical capability and the contractual authority to freeze those wallets — and chose not to.
“Circle permitted this criminal use of its technology and services,” attorneys for McCollum wrote. “These losses would not have occurred, or would have been substantially reduced, had Circle taken timely action.”
The law firm Mira Gibb is representing McCollum and other investors. Damages will be determined at trial.
Plaintiffs also pointed to a specific precedent: roughly a week before the Drift hack, Circle froze 16 USDC wallets in connection with a sealed US civil case. That action, they argue, proves Circle had the tools and the will to act — just not this time.
Circle has not publicly commented on the lawsuit. Cointelegraph reached out but received no immediate response.
ARK Invest’s director of research for digital assets, Lorenzo Valente, stepped in with a defense of Circle’s position. He argued that freezing funds without a legal order sets a dangerous precedent — one that hands private companies arbitrary power over who gets frozen and who doesn’t.
“Every future freeze is now a judgment call. Every non-freeze is a political statement,” Valente wrote. He acknowledged, though, that the stolen funds would likely end up funding North Korea’s weapons program.
“Whether Circle got it right comes down to how much you weigh rule-of-law principles vs concrete harm,” he said.
After the bridge transfer, the stolen USDC was converted into Ether and routed through Tornado Cash, the privacy protocol, to obscure the trail.
Crypto analytics firm Elliptic suspects North Korean state-backed hackers were behind the exploit. Elliptic noted the attackers made over 100 transactions via Circle’s bridging technology during US business hours.
The Drift Protocol hack wiped out a large chunk of the platform’s total value locked and sent ripples across multiple DeFi platforms.
CRCL stock moved 1.84% following the news.
The post Circle Internet (CRCL) Stock — Lawsuit Filed Over $280M Drift Protocol Hack appeared first on CoinCentral.
