Circle Faces Lawsuit Over USDC Transfers Tied to $280M Drift Hack

Highlights:

• Circle faces a proposed class action over its response to the stolen USDC after the Drift hack.
• Plaintiffs say Circle could have frozen funds earlier as attackers moved assets across networks.
• Circle previously said it can freeze funds only when a lawful order or authority is in place.

Circle is facing a proposed class action after investors affected by the April 1 Drift Protocol hack accused the stablecoin issuer of failing to act while stolen funds moved through its own infrastructure. The lawsuit was filed on April 14 and announced by Gibbs Mura, A Law Group on April 15. It argues that Circle let attackers move about $230 million in USDC from Solana to Ethereum through its Cross-Chain Transfer Protocol, known as CCTP, instead of freezing the funds.

Circle Sued Over $280M Drift Protocol Hack

A class action lawsuit has been filed against Circle Internet Group in a US district court in Massachusetts.

The lawsuit accuses the stablecoin giant of failing to freeze funds during a $280 million exploit of Drift Protocol ( $DRIFT )… pic.twitter.com/5xdL3BdPmG

— BSCN (@BSCNews) April 17, 2026

The case adds a legal angle to one of the biggest crypto security incidents of 2026. Drift, a Solana-based decentralized trading platform, lost around $280 million to $285 million in the attack, according to public reports and security researchers.

Chainalysis said the attacker first gained admin control. Then, they used that access to withdraw real assets after depositing a worthless token as collateral. It also said the attack appeared highly coordinated. In addition, some signs matched activity previously linked to North Korea, although formal attribution was still pending.

Lawsuit Focuses on Circle’s Role After the Drift Protocol hack

According to the law firm, the complaint says Circle had the technical ability and the legal authority to freeze the funds but did not act. The statement says the stolen USDC moved through more than 100 transactions over several hours.

Because of that, the plaintiffs are now seeking to recover losses linked to the hack. The firm also said it is reviewing possible additional claims against Circle. The filing does not change the main facts of the exploit. However, it does shift attention to what happened after the stolen funds started moving.

That issue had already become a public debate in the days after the attack. On-chain investigator ZachXBT accused Circle of acting too slowly in several major hacks. He said the company failed to freeze more than $420 million in stolen USDC across 15 cases recorded over the previous four years. He also pointed to the Drift attack as one example.

1/ Welcome to the Circle $USDC files.

$420M+ in alleged compliance failures since 2022, including fifteen cases of the US-regulated stablecoin issuer taking minimal action against illicit funds. pic.twitter.com/OiWZz5MrVM

— ZachXBT (@zachxbt) April 3, 2026

Circle Says Freeze Powers are Bound By Law

Circle later responded to the broader criticism in a blog post published on April 10 by its Chief Strategy Officer, Dante Disparte. In that response, the company said freezing USDC is not a decision it can make freely whenever the market expects it. Instead, Circle said it only freezes funds when it is legally required to do so by a proper authority through a lawful process. It added that this rule is meant to protect users from unfair or arbitrary actions. 

NEW: CIRCLE RESPONDS TO DRIFT EXPLOIT, SAYS IT FREEZES USDC ONLY UNDER LEGAL COMPULSION. URGES PASSAGE OF GENIUS AND CLARITY ACTS TO DEFINE CRYPTO LEGAL FRAMEWORK.#USDC #CryptoNews #DeFi #Blockchain pic.twitter.com/VLr7sQSUIZ

— Crypto News Hunters 🎯 (@CryptoNewsHntrs) April 10, 2026

The lawsuit now puts that argument under direct pressure. The plaintiffs say Circle should have acted earlier because it had the tools to do so. Circle, however, says having the tools is not enough without legal authority. As a result, this dispute could become one of the most closely watched legal questions to come out of the Drift exploit.