Circle faces renewed scrutiny following a $285 million hack of the Solana-based Drift Protocol. Blockchain investigator ZachXBT accused Circle of failing to freeze $230 million in stolen USDC bridged to Ethereum. This incident comes days after Circle erroneously froze 16 wallets, which it is now unfreezing.
A major security breach struck the Solana ecosystem, resulting in a loss of approximately $285 million from Drift Protocol. The hack involved several coins, including the stablecoin USDC issued by Circle. This incident occurred just days after Circle faced criticism for mistakenly freezing 16 wallets showing business transactions.
Blockchain investigator ZachXBT publicly accused Circle of a critical failure. He stated that the company had six hours to freeze $230 million USDC bridged from Solana to Ethereum via CCTP but did not act. “6 hours is how long Circle had to freeze stolen funds from the $280M+ Drift hack,” ZachXBT said.
ZachXBT alleged that over 100 transactions occurred unhindered for three hours post-hack. He labeled Circle and its CEO, Jeremy Allaire, as bad actors for the industry. In response to user questions about monitoring, ZachXBT noted the company uses buzzwords like “compliance” without proper implementation.
The exploit’s impact extended beyond Drift Protocol. According to a post by SolanaFloor, about 11 protocols suspended activity, with Ranger Finance losing $900,000. However, the Chief Product Officer at the Solana Foundation clarified this was an isolated incident. “This is an isolated incident and says nothing about Solana DeFi…” he stated.
For the broader cryptocurrency market, the event raises concerns about DeFi security amid regulatory pressures. Meanwhile, Circle‘s stock extended its decline that began a week prior. Technical indicators showed the stock was oversold, with the Money Flow Index dropping to 19 and Bull Bear Power indicating seller dominance.
