USDC news

Drift Protocol is partnering with Tether to create a $148 million recovery plan for victims of a $285 million exploit, moving away from Circle's USDC stablecoin. The plan includes a revenue-linked credit facility and a recovery pool funded by exchange revenue and committed capital. The shift follows criticism of Circle for not freezing stolen funds moved through its cross-chain protocol, while Tether highlights its law enforcement collaborations. The U.S. Treasury Department has urged Congress to consider legal protections for stablecoin issuers that voluntarily freeze suspicious assets.

Drift Protocol has secured a recovery package of up to $127.5 million from Tether to compensate users after a $280 million exploit. The plan includes a $100 million credit facility and a recovery pool to address losses, with a token to be issued for claims. The platform will pivot from USDC to USDT for settlements, following criticism of Circle's response. The exploit, linked to suspected North Korean actors, led to nearly $296 million in withdrawals, and Drift is working with authorities to recover funds.

Y Combinator has completed its first all-stablecoin funding round, investing $500,000 in USDC on Solana for prediction markets startup Totalis. The accelerator executed the investment in three onchain transactions via financial platform Ramp. Y Combinator's leadership confirmed the accelerator will invest in stablecoins for any funded startup, not just crypto companies, citing faster settlement times and lower costs compared to traditional banking rails. This move reflects Y Combinator's commitment to crypto-native operations.

Crypto card monthly volume reached $600 million in March, more than tripling from $187 million a year ago, reflecting growing adoption of crypto-linked debit and prepaid cards. USDT has been the dominant settlement currency, but USDC is gaining ground, driven by adoption in Western markets where regulatory clarity and institutional backing are important. The stablecoin composition of card volume serves as a proxy for geographic and demographic shifts, with a rising USDC share indicating a broadening user base beyond Tether's traditional strongholds.

Circle has launched CPN Managed Payments, a platform enabling banks and fintechs to use USDC stablecoin benefits without holding the digital asset. The service abstracts blockchain complexity, handling minting, burning, and compliance while clients transact in fiat. This move aims to expand Circle's distribution network for more efficient cross-border settlements and lower FX costs. USDC, the second-largest stablecoin, has facilitated over $70 trillion in onchain settlements, with nearly $12 trillion in Q4 2025.

Circle's freeze power over USDC is under scrutiny after on-chain investigator ZachXBT alleged inconsistent application. The firm reportedly froze 16 operational business wallets in a sealed civil matter while being slow to act in 15 theft cases involving over $420 million since 2022. The controversy highlights the tension between Circle's legal compliance obligations and user continuity, with its terms granting broad discretion to block addresses. As USDC holds about 24.5% of the stablecoin market, its freeze decisions carry systemic weight, raising questions about transparency and operational risk for businesses.

Circle is facing criticism for not freezing $232 million in USDC stolen during the $285 million Drift hack, as the attacker used Circle's cross-chain protocol to move funds from Solana to Ethereum. Critics argue Circle could have acted faster using its ability to blacklist addresses, but the company says it only freezes assets when legally required to comply with regulations and protect user rights. The incident highlights tensions in the stablecoin sector, where issuers balance preventing illicit activity with legal risks of acting without court orders. Some experts call for clearer rules to address this 'gray zone,' noting that ambiguity makes it difficult for markets to price risks consistently.

Circle faces criticism after $230 million in stolen USDC flowed through its bridge during the $285 million Drift Protocol exploit, contrasting with its recent freeze of legitimate accounts. The attack, potentially linked to North Korea's Lazarus Group, drained Solana-based Drift vaults and impacted third-party apps. This highlights tensions between centralized control in stablecoins and permissionless crypto markets.

Drift Protocol, a Solana-based decentralized exchange, confirmed a $280 million exploit involving the abuse of Solana's durable nonces feature, which allows pre-signed transactions. The attack enabled unauthorized access to drain funds, including Circle's USDC stablecoin. The incident has drawn criticism toward Circle for not freezing the stolen USDC during the six-hour window before the funds were bridged to Ethereum, highlighting ongoing debates over centralized intervention in decentralized finance exploits.

Drift Protocol, a Solana-based trading platform, suffered a $280 million exploit after an attacker gained unauthorized access through a sophisticated operation involving durable nonces and social engineering, leading to a takeover of administrative powers. The attack affected all deposits, and Drift has frozen protocol functions while working to track the stolen funds. Onchain investigator ZachXBT criticized Circle for allegedly allowing over $230 million in USDC linked to the exploit to move via its Cross-Chain Transfer Protocol without freezing the funds, raising concerns about centralized oversight in the crypto industry.