Drift Protocol secures nearly $150 million in support from Tether and partners to fund user recovery and relaunch after an April 1 exploit on Solana, signaling a coordinated industry response.

Drift will switch its settlement layer from Circle's USDC to Tether's USDT, with Tether providing extra liquidity and incentives to reduce trading costs during the relaunch.

The recovery package includes a $100 million revenue-linked credit facility, an ecosystem grant, and loans to market makers, all directed toward a dedicated recovery pool to address roughly $295 million in outstanding user losses over time.

The incident intensified scrutiny of Circle for not freezing funds in real time, highlighting tensions between immediate security actions and legal constraints, while Tether has a record of freezing funds when directed.

Drift’s recovery effort feeds into ongoing debates about responsibility and governance in DeFi after high-profile exploits.

The initiative reflects a broader industry trend of collaborative efforts to restore user funds and support relaunches after major crypto hacks.

Tether positions itself as an active responder during security incidents, aiming to restore user confidence and enable a smooth relaunch without relying on litigation or fixed repayment timelines.

The recovery plan includes two independent audits, tighter security controls, a new multisig structure, and enforced delays on critical actions as part of a full rebuild of Drift’s security model.

The attack followed earlier Solana DeFi exploits linked by authorities to a months-long social engineering operation potentially involving North Korean actors.

The exploit involved transferring over 232 million USDC from Solana to Ethereum via Circle’s Cross-Chain Transfer Protocol, prompting questions about Circle’s response and liquidity controls.

Drift’s insurance fund remains intact; the protocol is working with law enforcement and forensics firms to trace and potentially recover funds, with recovered assets cycling back into the recovery pool.

Drift emphasizes the plan as the first step toward making users whole over time, acknowledging existing security vulnerabilities despite mature governance and oversight.