Circle slapped with class-action lawsuit over 2026's largest hack

By TheStreet Roundtable

5 days ago

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The stablecoin giant Circle Internet Group (NYSE: CRCL) has been slapped with a class-action lawsuit for allegedly failing to freeze assets during the largest crypto hack of the year.

Plaintiff Joshua McCollum filed the suit on behalf of more than 100 users affected by the Drift Protocol hack in the U.S. District Court of Massachusetts on Apr. 14.

Drift Protocol hack

It was on Apr. 1 that Solana-based Drift Protocol got hacked for approximately $280 million in different crypto assets. North Korea-backed actors are the main suspects behind the largest crypto hack of 2026.

The hackers turned a large amount of the stolen assets into USDC, the stablecoin issued by Circle, within hours of the exploit. Next, they bridged approximately $230 million from Solana (SOL) to Ethereum using Circle’s Cross-Chain Transfer Protocol (CCTP).

What plaintiffs allege

Circle didn't step in to freeze the assets during the Drift exploit despite onchain alerts going viral, the plaintiffs alleged.

The attackers succeeded in stealing around $230 million in assets belonging to Drift depositors, they added.

"These losses would not have occurred, or would have been substantially reduced, had Circle taken timely action."

The hackers couldn't steal the entire $280 million amount because of the timely intervention of other crypto platforms like Ondo Finance, they further claimed. But Circle let criminals use its technology, they added.

The plaintiffs have demanded a jury trial in the lawsuit against Circle.

Circle says it acts only when required by law

Circle already responded to the criticism last week, with the chief strategy officer, Dante Disparte, saying it only freezes USDC when the law requires it to act.

"Our ability to freeze funds is a compliance obligation — exercised only when we are legally compelled by an appropriate authority, through lawful process," he added.

Disparte argued that the GENIUS Act and the CLARITY Act offer an opportunity to codify these standards before the next exploit forces a "capitulation" of open systems as "unsafe and unfit" to be the backbone of the global economy.

The goal isn't to build a system where private companies can unilaterally restrict user fund access; instead, the goal is to build a system where legally sanctioned interventions can happen at the speed of the threat, he added in the company's defense.

TheStreet Roundtablereached out to Circle for a comment on the latest development and did not receive a response by the time of publication.

Tether replaces Circle

Circle's rival and the largest stablecoin company, Tether, promptly stepped in to support Drift. The stablecoin leader, along with the Solana Foundation, announced a recovery plan of $150 million on Apr. 16.

The goal of the plan is to help affected users recover funds and relaunch Drift as the protocol transitions its core settlement layer from USDC to USDT.