Joshua McCollum, a victim of the Drift Protocol hack, along with over 100 others, has filed a lawsuit against Circle in Massachusetts. The plaintiffs accuse the stablecoin issuer of aiding hackers and negligence.
The lawsuit claims that the firm allowed cybercriminals to transfer approximately $230 million in USDC to the Ethereum network via the cross-chain protocol CCTP.
“Circle allowed criminals to exploit its technology. If the company had intervened in time, these losses could have been avoided or significantly reduced,” commented McCollum's attorneys.
The victims of the attack are seeking full compensation from the issuer, with the total amount to be determined by the court.
Lawyers noted that about a week before the Drift hack, Circle froze 16 addresses as part of a sealed civil case in the U.S. They argue that this precedent demonstrates the firm's technical ability to promptly block funds.
On-chain detective ZachXBT criticized the issuer's slow response to illegal transactions involving USDC. Following the Drift hack, he reported at least 15 instances of the company's inaction that cost victims $420 million.
Circle's Position and Community Reaction
During a press conference, Circle CEO Jeremy Allaire defended the decision not to intervene. He stated that wallet freezes are carried out solely at the direction of law enforcement.
Taking actions outside established legal procedures in private cases could create a "serious moral dilemma," the CEO noted.
“If someone believes that Circle should ignore the law and make its own decisions, that is a very risky position,” Allaire added.
Lorenzo Valente, director of digital asset research at ARK Invest, supported the issuer. He stated that the company acted correctly, as 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 🧵
— Lorenzo Valente (@LorenzoARK) April 16, 2026
1. "Code is not law, but law is not law… https://t.co/eKOXzCSMGz
“Every future freeze will become a subjective decision. Every refusal to freeze will be a political statement. Why freeze the Drift hacker but not that questionable Nigerian scam wallet? Why this protester and not that one?” he wrote.
He 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 potentially fund North Korea's nuclear program.
Meanwhile, Bloomberg analyst James Seyffart called Circle's arguments and those of its CEO 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 must do so. The position of 'only with a court order' is a vague excuse that misses the point,” he noted.
As of this writing, Circle has not commented on the class action lawsuit.
On April 16, Drift secured $148 million from Tether and other partners to recover from the hack.