{"id":2474,"date":"2026-04-18T22:00:49","date_gmt":"2026-04-18T22:00:49","guid":{"rendered":"https:\/\/blog.coinsignals.net\/?p=2474"},"modified":"2026-04-18T22:00:49","modified_gmt":"2026-04-18T22:00:49","slug":"analyst-defends-circles-no-freeze-stance-on-280-million-dollar-drift-hack-funds","status":"publish","type":"post","link":"https:\/\/blog.coinsignals.net\/index.php\/2026\/04\/18\/analyst-defends-circles-no-freeze-stance-on-280-million-dollar-drift-hack-funds\/","title":{"rendered":"Analyst Defends Circle\u2019s No Freeze Stance on 280 Million Dollar Drift Hack Funds"},"content":{"rendered":"\n
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A single unilateral freeze by Circle could have set off a chain reaction across decentralized exchanges, bridges, oracles and even wallets.<\/p>\n\n\n\n

The criticism surrounding Circle has intensified after a 280 million dollar exploit on the Drift Protocol. A California based legal group has filed a class action lawsuit claiming the company failed to act while hackers linked to North Korea moved large amounts of stolen USDC through its bridge, making it responsible for investor losses.<\/p>\n\n\n\n

Despite the backlash, an analyst argues that Circle\u2019s decision not to intervene was not negligence but a necessary step to preserve the core principles that make USDC reliable for institutional users.<\/p>\n\n\n\n

Why Freezing the Funds Could Have Been More Harmful<\/strong><\/p>\n\n\n\n

Responding to criticism aimed at Circle and its chief executive Jeremy Allaire, Lorenzo Valente explained that freezing the stolen funds without a legal order would have turned the stablecoin into something governed by arbitrary decisions. In his view, that would mean control based on preference rather than clear rules.<\/p>\n\n\n\n

He noted that the incident was not a simple theft but a market or oracle exploit, which places it in a gray area that can include aggressive yet legal trading strategies. Allowing Circle to determine which actions cross the line could create a system without legal safeguards or avenues for appeal.<\/p>\n\n\n\n

Valente also warned about wider consequences. If stablecoin issuers begin freezing funds based on their own judgment, that approach could spread across the ecosystem. Bridges might reverse transfers, decentralized exchanges could blacklist participants, wallets might block transactions and oracles could manipulate price feeds. He stressed that permissionless onchain finance is designed so that no single actor has that level of authority.<\/p>\n\n\n\n

He further argued that due process is not a limitation but a key feature. Institutions rely on USDC because balances cannot be altered arbitrarily. A system that responds to public pressure could easily be influenced by any loud or coordinated group.<\/p>\n\n\n\n

Another concern involves legal exposure. Stolen funds often move quickly, passing through multiple hands including innocent liquidity providers and market participants. Freezing assets too aggressively could harm individuals who had no connection to the original exploit, potentially opening companies like Circle to lawsuits from affected parties.<\/p>\n\n\n\n

Valente also pointed out inconsistencies in public criticism. He referenced ZachXBT, who has previously criticized Circle for freezing wallets without clear explanations. Now, similar voices are demanding faster intervention. According to Valente, companies must either exercise broad discretion or strictly follow legal orders, but cannot be expected to do both.<\/p>\n\n\n\n

The lawsuit, filed by Gibbs Mura, has been described as potentially precedent setting. Jacob Robinson warned that the claims could be dangerous, including accusations that Circle enabled hackers by allowing use of its Cross Chain Transfer Protocol and that it had a duty to act. While he doubts the case will succeed, he noted that a favorable ruling could impact anyone operating blockchain bridges.<\/p>\n\n\n\n

Drift Shifts Strategy With Tether Partnership<\/strong><\/p>\n\n\n\n

As Circle addresses legal and public scrutiny, Drift Protocol is moving forward with a new plan. The platform has partnered with Tether in a deal worth nearly 150 million dollars, aiming to relaunch using USDT instead of USDC for settlements.<\/p>\n\n\n\n

The recovery strategy includes a 100 million dollar credit facility tied to revenue, ecosystem grants and loans for market makers to help compensate affected users.<\/p>\n\n\n\n

Earlier, Jeremy Allaire reaffirmed the company\u2019s stance during an April 13 press conference in Seoul. He emphasized that Circle only acts when required by law and does not make discretionary judgments, even in situations where the ethical choice may appear straightforward.#crypto#cryptonews https:\/\/coinsignals.net<\/a> https:\/\/t.me\/coinsignalpublic<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A single unilateral freeze by Circle could have set off a chain reaction across decentralized exchanges, bridges, oracles and even wallets. The criticism surrounding Circle has...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2474","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/posts\/2474","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/comments?post=2474"}],"version-history":[{"count":1,"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/posts\/2474\/revisions"}],"predecessor-version":[{"id":2476,"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/posts\/2474\/revisions\/2476"}],"wp:attachment":[{"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/media?parent=2474"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/categories?post=2474"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/tags?post=2474"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}