Tether Steps In to Rescue Drift Protocol

Tether has announced a $150 million recovery initiative aimed at helping the decentralized exchange Drift Protocol resume operations following a major hack that resulted in losses of approximately $280 million.

According to the announcement, Tether will contribute $127.5 million, with the remaining funds coming from undisclosed partners. The recovery plan is not limited to a one-time capital injection. Instead, user fund restoration will be tied to trading activity on the platform. This means that as normal trading resumes, user balances will be gradually replenished.

Drift itself will play an active role in the recovery process, supporting the restoration of funds as it brings services back online. One of the key changes will be a transition from the stablecoin USDC to USDT, issued by Tether.

This recovery effort reflects a broader trend in the cryptocurrency industry, where companies increasingly collaborate to mitigate the impact of major security breaches and rebuild user trust.

However, the situation has not been without controversy. Circle has faced criticism for its lack of response following the attack. Experts claim the company had several hours to freeze funds linked to the attacker but failed to act. During that time, the perpetrator reportedly moved over $232 million in USDC from the Solana network to Ethereum using a cross-chain transfer mechanism.

The funds were transferred across more than 100 transactions within six hours. Analysts suggest there may be links between the attack and North Korea.

The incident also highlights a growing cybersecurity concern within the crypto sector. Increasingly, threats are not only external but internal. Reports indicate that individuals linked to North Korea are posing as professionals from countries like South Korea or Japan and applying for jobs at crypto firms. Once hired, their goal is not legitimate work but identifying vulnerabilities in systems and exploiting them to steal funds or sensitive data.