Tether to Lead $150M Recovery Program for DeFi Platform Drift Protocol
Stablecoin issuer Tether, the company behind USDt (USDT), said on Thursday it would support a $150 million recovery program for its Drift Protocol decentralized exchange (DEX) following a platform exploit in April.
The $280 million Drift Protocol exploit recovery plan includes $127.5 million from Tether, with the rest coming from unknown partners, according to Tether's announcement. Teter said:
“Rather than relying solely on upfront capital, the structure will link funding and recovery to ongoing business activity on the Drift platform, allowing users' balances to be restored when the exchange returns to normal operations.”
The Drift Protocol platform “contributes directly” to the recovery of user funds as the platform resumes normal trading activity.
Drift will move its settlement asset from Circle's USDC (USDC) dollar-peg stablecoin to Tether's USDt as part of a platform reset.
Cointelegraph reached out to Tether but did not receive a response by the time of publication.
The recovery program reflects a growing trend for crypto industry companies to collaborate to restore users' funds and platforms after major data breaches or cyber security attacks that cost hundreds of millions in losses.
Related: Drift sends message onchain to wallets tied to $280M exploit
Circle is under fire for not freezing funds after the Drift Protocol attack
Crypto industry executives, cybersecurity researchers and blockchain security firms have criticized the freezing of USDC wallets linked to the Drift Protocol exploit despite 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 more than $232 million USD from the Solana network to the Ethereum network, according to onchain sleuth ZachXBT.
The money was transferred in more than 100 transactions, he said, “Although the attacker spent six consecutive hours through Searle's native bridge, no USDC was frozen. The attacker connected to North Korea through Elliptic.”
On April 9, Circle's stock fell by nearly 10%, following criticism that the company had not cash-strapped and missed forecasts from market analysts. NYSE-traded shares have outpaced that decline, rising about 20% since yesterday's close, according to Yahoo Finance data.
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