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Circle Internet Group is facing a proposed class action in the United States after investors linked to Drift Protocol alleged the company did not act quickly enough during an exploit that led to losses of approximately $280 million.
The lawsuit was filed in a Massachusetts district court by Drift investor Joshua McCollum, who is seeking to represent more than 100 affected investors.
According to the complaint, attackers transferred roughly $230 million in USDC from the Solana blockchain to Ethereum using Circle’s Cross-Chain Transfer Protocol (CCTP) over several hours. Plaintiffs allege Circle did not freeze or block the transactions during that period.
McCollum’s legal team argues Circle had both the technical capability and sufficient time to intervene, and that the scale of investor losses could have been reduced with timely action. The complaint also alleges negligence and aiding and abetting conversion, with damages to be determined at trial.
A central issue in the case is responsibility among crypto firms that maintain some level of control over digital assets or the infrastructure used to move them. While Circle may have the technical means to freeze wallets or halt transfers, the company has argued in related contexts that doing so without a court order or clear legal mandate could raise legal and ethical concerns.
McCollum’s team pointed to a prior incident in which Circle froze 16 USDC wallets connected to a sealed U.S. civil case shortly before the Drift exploit. Plaintiffs argue this demonstrates Circle’s ability to intervene when it chooses to do so.
Blockchain analytics firm Elliptic suggested that North Korean state-backed hackers may have been responsible for the Drift exploit. Elliptic reported that the attackers used Circle’s bridging technology in more than 100 transactions during normal U.S. business hours. After moving the funds, the attackers allegedly converted the stolen assets into Ether and sent them through Tornado Cash.
ARK Invest’s director of research for digital assets, Lorenzo Valente, defended Circle’s approach, arguing that once a company begins freezing funds based on subjective judgment, future cases become politically and ethically complicated. He said deciding which wallets to freeze and which to ignore could expose firms to accusations of bias or selective enforcement.
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