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

Following a significant exploit, Drift Protocol has announced plans to relaunch with USDT as its primary settlement layer, courtesy of a $147.5 million funding package from Tether and other 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. Previously, Drift utilized Circle's USDC as its settlement layer. The funding package comprises a revenue-linked credit facility, ecosystem grants, and loans to market makers, with a portion of trading revenue allocated to a recovery pool to cover approximately $295 million in user losses over time. The exploit, linked to a North Korea-based group, resulted in the loss of over $270 million on April 1, causing Drift's governance token, DRIFT, to decline by about 70% in value. The incident sparked criticism towards Circle for not freezing the transferred funds, with some arguing that the company could have acted faster to prevent the attacker from moving the assets. In response, Circle's CEO, Jeremy Allaire, stated that the company only freezes USDC wallets when directed by law enforcement or courts. In contrast, USDT has demonstrated a more agile approach to freezing funds linked to illicit activities. As the largest decentralized perpetual futures exchange on Solana, Drift boasts over 175,000 users and $150 billion in cumulative trading volume. The platform's transition to USDT is expected to position the stablecoin at the center of its trading infrastructure, providing a pathway to restore user funds and resume operations. The move is also seen as a strategic play in the intensifying stablecoin market, where competition is heating up among exchanges, fintechs, and traditional financial institutions vying for control of on-ramps, liquidity, and settlement layers.