A new class-action suit is asking a U.S. court to decide whether Circle — the issuer of the USDC stablecoin and operator of a major cross-chain bridge — should have blocked hundreds of millions in stolen funds after a high-profile DeFi hack.
What happened
- On April 1, attackers drained Drift Protocol and moved roughly $280 million in USDC from Solana to Ethereum using Circle’s Cross-Chain Transfer Protocol (CCTP), a bridging service the company runs. According to reporting and blockchain analysis, the transfers occurred over several hours during regular U.S. business hours. After reaching Ethereum, much of the haul was converted and routed through Tornado Cash, a privacy protocol used to obfuscate transactions.
- Crypto analytics firm Elliptic attributed the theft to North Korea–linked, state-backed operators and flagged more than 100 transactions that leveraged Circle’s bridge.
The lawsuit
- Filed in federal court in Massachusetts, the class action was brought by Drift investor Joshua McCollum on behalf of more than 100 affected users. Plaintiffs are represented by law firm Mira Gibb.
- The complaint names Circle Internet Group as defendant and accuses the company of allowing criminal use of its technology. It presses two claims: negligence and aiding and abetting conversion (a legal theory for helping someone unlawfully take another’s property). Damages will be decided at trial.
- Central to plaintiffs’ argument: about a week before the Drift attack, Circle froze 16 USDC wallets tied to a sealed U.S. civil case. Plaintiffs say the freeze demonstrates Circle had the ability and speed to block illicit flows and that it could — and should — have acted when the Drift attack occurred.
The debate
- The suit underscores a broader tension in crypto: when should centralized service providers intervene? Supporters of stronger custodial responsibility argue firms that can freeze funds must do so to prevent criminals from cashing out stolen assets. Critics warn that giving private companies unilateral freezing power risks politicizing enforcement and over-centralizing a space built on permissionless rails.
- Lorenzo Valente, ARK Invest’s director of digital asset research, told reporters Circle did the right thing by requiring a court order before freezing funds, arguing that otherwise freezes could become arbitrary or political.
Where things stand
- Circle has not publicly commented on the suit. The case now asks a federal judge to weigh whether a stablecoin and bridge operator had a legal duty to block the movement of funds tied to a major hack — a decision that could set an important precedent for how centralized crypto infrastructure responds to theft going forward.
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