Circle Internet Group faces a class action brought by Drift Protocol investor Joshua McCollum, who says the company failed to freeze funds stolen in a $280 million exploit on April 1. Filed in a U.S. district court in Massachusetts on behalf of more than 100 members, the complaint alleges Circle allowed attackers to move roughly $230 million in USDC from Solana to Ethereum via Circle’s Cross-Chain Transfer Protocol (CCTP) over several hours without intervention.
“Circle permitted this criminal use of its technology and services,” McCollum’s attorneys wrote, adding that the losses “would not have occurred, or would have been substantially reduced, had Circle taken timely action.” The suit accuses Circle of aiding and abetting conversion and negligence. The law firm Mira Gibb, representing McCollum and other Drift investors, seeks damages to be determined at trial.
The case highlights a legal gray area for crypto firms that retain control over on-chain assets. While such firms may technically be able to intervene or freeze tokens, they often cite regulatory limits or lack of immediate legal authority as reasons for not acting during active exploits, leaving questions about accountability as events unfold in real time.
McCollum’s lawyers note that Circle froze 16 USDC wallets in connection with a sealed U.S. civil case about a week before the Drift incident, arguing this shows the company had the capacity to block transactions. Cointelegraph contacted Circle for comment but did not receive an immediate response.
Blockchain analytics firm Elliptic has suggested North Korean state-linked hackers carried out the exploit, observing over 100 transactions via Circle’s bridge during U.S. working hours. Reportedly, the stolen USDC was converted to Ether and passed through the Tornado Cash privacy protocol to obscure the trail.
ARK Invest research director Lorenzo Valente argued Circle may have made the correct call by not freezing funds absent legal process, warning that unilateral freezes could invite arbitrary decisions: “Every future freeze is now a judgment call. Every non-freeze is a political statement.” Valente acknowledged reasonable disagreement over weighing rule-of-law principles against concrete harm and speculated the proceeds could support North Korea’s weapons programs.
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