Drift Secures $148 Million in Funding from Tether and Partners to Recover from Exploit

Following a recent exploit by a North Korean group, Drift Protocol has announced plans to relaunch with Tether's USDT as its settlement layer, after securing a funding package of up to $147.5 million from Tether and its partners. The package, which includes $127.5 million from Tether and $20 million from other partners, aims to support user recovery and reboot the platform as a USDT-based perpetual futures exchange on Solana, replacing Circle's USDC as its settlement layer. The funding consists of a revenue-linked credit facility, ecosystem grants, and loans to market makers, with a portion of trading revenue and committed capital allocated to a recovery pool to cover approximately $295 million in user losses over time. The exploit, which occurred on April 1, resulted in losses of over $270 million and a 70% decline in the value of Drift's governance token, DRIFT. Circle faced criticism for its handling of the exploit, with some arguing that it could have acted faster to freeze funds and prevent the attacker from transferring assets. In contrast, Tether has a history of freezing assets linked to hacks and illicit activities. The funding package also includes plans for fee reductions and user incentives tied to Drift's transition to USDT, as well as liquidity support for designated market makers to enhance trading depth at relaunch. With this move, USDT will be at the center of Drift's trading infrastructure, providing a pathway to restore user funds and resume operations.