Circle CEO Jeremy Allaire has defended the company’s failure to freeze $230 million in USDC stolen from the Solana-based Drift Protocol, citing a legal and moral dilemma. During a press conference in Seoul, Allaire stated that Circle only acts when obligated by law and cannot independently decide to freeze assets. The company is expanding in South Korea through partnerships with major local exchanges.
The stablecoin issuer Circle has defended its inaction during an exploit that led to roughly $280 million in losses from the Solana-based Drift Protocol. CEO Jeremy Allaire responded during a press conference in Seoul, South Korea.
Allaire defended Circle’s inaction during the exploit, stating that Circle only acts when the law obligates it to do so. He insisted it would be risky for the company to step away from legal obligations to make its own decisions.
The $280 million exploit on Drift Protocol occurred earlier this month through coordinated social engineering. The attacker gained unauthorized access to administrative permissions tied to the protocol’s security council.
On-chain sleuths believe the damage could have been reduced if Circle had frozen the stolen funds. The attackers moved $230 million in USDC from Solana to Ethereum via Circle’s Cross-Chain Transfer Protocol over several hours.
Allaire added that it would be a risky proposition to expect the stablecoin issuer to step away from what the law says to make its own decisions. The company is working with regulators on clarity for preventive actions under extreme circumstances.
Meanwhile, Circle is expanding its presence in Korea by signing memorandums of understanding with Upbit and Bithumb. The partnerships aim to increase the adoption of USDC in the local crypto market.
