A proposed class action lawsuit lodged in a U.S. district court in Massachusetts accuses Circle Internet Group (NYSE:CRCL) of failing to block the movement of stolen funds after a large-scale hack of the Drift Protocol.
The complaint alleges that, following an April 1 exploit that drained roughly $280 million from Drift Protocol, attackers were able to transfer about $230 million in USDC stablecoin. Plaintiffs contend those transfers occurred over several hours as the assets were routed across blockchains using Circle’s Cross-Chain Transfer Protocol.
Plaintiffs argue Circle had both the technical means and the contractual right to freeze or otherwise interdict the funds as they were being moved. According to the filing, the company did not take steps to stop the transfers, and that inaction contributed to investor losses. The complaint sets out claims including negligence and aiding unlawful conversion, and it asserts that timely intervention might have significantly limited the amount lost by investors.
The exploit of Drift Protocol ranks among the largest hacks reported in 2026. The attack not only resulted in the alleged transfer of hundreds of millions of dollars in USDC, but also precipitated sharp declines in Drift’s total value locked. Those declines reverberated across multiple decentralized finance platforms that had exposure to or interactions with Drift.
Details in the complaint emphasize the plaintiffs’ view that Circle’s Cross-Chain Transfer Protocol was a vector through which transferred assets moved across blockchain networks, and that because the protocol was involved, Circle had visibility or control sufficient to intervene. The filing places responsibility for the subsequent movements of USDC squarely with the company, asserting legal and technical failures.
The lawsuit seeks to hold Circle accountable for the alleged losses by pursuing remedies tied to the claims of negligence and unlawful conversion. As filed, the case sets the stage for litigation that will determine whether the company’s actions or inactions meet the legal threshold described by the plaintiffs.
Contextual note: The complaint links the April 1 breach and the subsequent on-chain movements to significant impacts on decentralized finance platforms' asset levels, though the filing itself focuses on Circle’s alleged failure to freeze funds and the legal theories stemming from that claim.