Tether To Lead $150M Recovery Program for DeFi Platform Drift Protocol | Crypto Security News
Crypto security news: Tether To Lead $150M Recovery Program for DeFi Platform Drift Protocol. This update explains what happened, why it matters for wallets, exchanges, traders, and users, and what the market should watch next.
Crypto Security Update
Stablecoin issuer Tether, the company behind USDt (USDT), said Thursday it will back a $150 million recovery program for the Drift Protocol decentralized exchange (DEX) following an exploit of the platform in April.The recovery plan for the $280 million Drift Protocol exploit includes $127.5 million from Tether, with the rest coming from undisclosed partners, according to Tether’s announcement. Tether said:“Rather than relying on upfront capital alone, the structure links funding and recovery to ongoing trading activity on the Drift platform, allowing user balances to be restored as the exchange returns to normal operations.”The Drift Protocol platform will “contribute directly” to the ongoing recovery of user funds as the platform resumes normal trading activity. The top 10 crypto assets stolen from the Drift Protocol in the exploit. Source: Quill AuditsDrift will also transition its settlement asset from Circle’s USDC (USDC) dollar-pegged stablecoin to Tether’s USDt as part of the platform’s relaunch. Cointelegraph reached out to Tether but did not receive a response by the time of publication. The recovery program highlights a growing trend of crypto industry companies collaborating to restore user funds and help platforms resume normal operations after major hacks or cybersecurity attacks that cause hundreds of millions of dollars in losses.Related: Drift sends onchain message to wallets tied to $280M exploitCircle comes under fire for not freezing funds after Drift Protocol attackCrypto industry executives, cybersecurity researchers and blockchain security firms criticized Circle for not freezing the USDC wallets linked to the Drift Protocol exploiter, despite having a window of several hours to intervene.The exploiter used Circle’s Cross-Chain Transfer Protocol (CCTP), a native bridge that allows tokens to be transferred to other blockchain networks, to transfer over $232 million USDC from the Solana network to the Ethereum network, according to onchain sleuth ZachXBT.Source: ZachXBTThe funds were transferred in more than 100 transactions, he said, adding, “Despite the attacker laundering funds over six consecutive hours across Circle’s own native bridge, no USDC was frozen. The attacker has been linked to North Korea by Elliptic.” Circle’s stock sank by about 10% on April 9, following criticism over the company’s failure to freeze the funds from the hack and downgraded forecasts from market analysts. The NYSE-traded shares have since clawed back that decline, increasing about 20% as of yesterday’s close, according to Yahoo Finance data.Magazine: Are DeFi devs liable for the illegal activity of others on their platforms?Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy
Why This Security News Matters
First, this development may affect exchange safety, wallet security, user trust, and broader market sentiment. In addition, it may influence platform security practices, fund recovery efforts, and regulatory pressure. As a result, traders and crypto users should watch the next updates closely.
What To Watch Next
Watch for official statements, post-mortem reports, wallet warnings, exchange responses, and fund recovery updates. In particular, any new details about phishing, exploits, private key exposure, or security patches could directly affect the broader crypto market.
