TLDR
- Drift secured up to $147.5 million in funding from Tether and partners to support its relaunch.
- Tether committed up to $127.5 million, while other partners pledged $20 million under the package.
- Drift will replace USDC with USDT as its settlement layer on Solana.
- The company will direct part of its trading revenue into a recovery pool for affected users.
- The exploit on April 1 resulted in losses of more than $270 million.
Drift confirmed a funding package worth up to $147.5 million from Tether and partners after a major exploit. The exchange will replace USDC with USDT as its settlement layer on Solana. The companies said the deal supports user recovery and prepares the platform for relaunch.
Drift Outlines Recovery Plan After Exploit
Drift said Tether will provide up to $127.5 million under the proposed agreement. Partners will contribute another $20 million to support the restart. The structure combines a revenue-linked credit facility, grants, and loans for market makers.
Drift will direct part of the trading revenue into a recovery pool for affected users. The pool will also receive committed capital from the funding package. The company aims to cover about $295 million in user losses over time.
The exploit occurred on April 1 after attackers had infiltrated Drift for months. The group posed as a quantitative trading firm before executing the breach. Reports linked the operation to North Korea and estimated losses above $270 million.
Attackers moved about $232 million in USDC from Solana to Ethereum. They used Circle’s cross-chain transfer protocol to move the funds. Following the incident, DRIFT lost about 70% of its market value.
Drift said it will relaunch as a USDT-based perpetual futures exchange on Solana. Tether also plans to fund fee reductions and user incentives tied to the transition. The company will extend liquidity support to selected market makers.
USDT Replaces USDC as Settlement Layer
Drift previously used USDC as its settlement layer for trading products. The platform now positions USDT at the center of its trading infrastructure. The shift forms part of the recovery and relaunch plan.
Circle faced criticism from parts of the crypto community after the exploit. Critics argued that Circle could have frozen wallets sooner. Blockchain investigator ZachXBT said the company could have acted faster to blacklist addresses.
Circle did not freeze the funds during the hack. Chief Executive Jeremy Allaire said Circle freezes wallets only when authorities direct it. He said the company does not intervene in real time during hacks due to legal risks.
Tether has frozen assets tied to hacks in past cases. The company has acted against wallets linked to illicit activity. USDT remains the largest stablecoin by supply, with about $185.5 billion outstanding.
USDC has about $78.6 billion in supply, according to CoinDesk data. However, USDC’s transaction volume has outpaced USDT in recent months. Circle has gained market share as it expands institutional use.
Drift operates as the largest decentralized perpetual futures exchange on Solana. The platform reports more than 175,000 users and about $150 billion in cumulative trading volume. Founded in 2021, Drift offers perpetuals, spot trading, lending, borrowing, and cross-margin trading.
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