USDT stablecoin issuer Tether has stepped in to anchor a massive recovery plan for Drift Protocol, the Solana-based decentralized exchange (DEX) that was crippled by a $286 million exploit earlier this month. However, the rescue package includes a potent commercial string that could challenge Circle's dominance of USDC on the Solana blockchain. According to the recovery plan, Drift […]
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Solana-based decentralized exchange (DEX) Drift Protocol has shared the highly anticipated user recovery plan alongside Tether and other collaborators. This move follows the major exploit that drained $285 million from the project’s vaults two weeks ago. Related Reading: Bitcoin Double Bottom Formation Eyes $82,500 Rally – Breakout Or Rejection Next? Drift Protocol Secures $150M Recovery Fund On Thursday, Drift Protocol, the largest decentralized perpetual futures exchange on the Solana blockchain, announced a collaboration with Tether and other partners to establish a “structured recovery plan backed by up to nearly $150 million in combined support” and relaunch with USDT “at the center.” According to the announcement, the funds include a $100 million revenue-linked credit line, an ecosystem grant, and loans to market makers, all intended to finance a dedicated user recovery pool. As NewsBTC reported, the Solana-based DEX suffered an exploit that stole hundreds of millions of dollars from its vaults on April 1. The attack took around $285 million in multiple crypto assets and became the largest exploit of 2026 to date. During the initial phase of the collaboration, a significant portion of exchange revenue, together with committed support capital, will be intended to fund this recovery pool, Drift explained, noting that any stolen funds recovered would be contributed to the pool. In addition, Drift revealed that it will issue a new token for the affected users to “streamline distribution of recovery assets as well as provide liquidity opportunities for impacted users.” The token will be a dedicated recovery token, separate from the DRIFT governance token, that is intended to represent a claim on the recovery pool and will be transferable. Solana DEX Eyes Hardened Security Framework The Solana-based project shared that it will harden its security, passing each component through independent audits by OtterSec and Asymmetric Research before relaunching the protocol. It will also introduce a new community-governed multisig to manage core protocol assets, requiring all multisig signers to operate on dedicated signing devices with transaction content independently verified outside the primary signing interface before any signature is executed. This aims to prevent similar attacks on the project. It’s worth noting that the malicious actors gained unauthorized access to Drift Protocol by manipulating its multisig approvals using Solana durable nonces. “The attack involved unauthorized or misrepresented transaction approvals obtained prior to execution, likely facilitated through durable nonce mechanisms and sophisticated social engineering,” the project explained on its first report. Since then, Blockchain analytics firm Elliptic has identified multiple indicators suggesting that the exploit is linked to the Democratic People’s Republic of Korea (DPRK), while Drift has affirmed that the exploit was a six-month operation to infiltrate the protocol’s inner circle and compromise their devices. USDT Settlements ‘At The Center’ Of Drift The project also detailed that it will relaunch with Tether’s USDT for settlements. Tether reportedly proposed to extend a USDT support facility to designated market makers “to reinforce deep, liquid markets from day one.” “Drift’s decision to integrate USD₮ into the relaunch and recovery of a major trading venue on Solana reinforces Tether’s role as a reliable settlement asset within the Solana ecosystem,” Tether stated. The shift from USDC to USDT settlement represents a significant change, following Circle’s decision not to freeze the stolen USDC during the initial attack. Notably, the exploiter swapped $270.9 million of the stolen assets into USDC within hours, bridged them from Solana to Ethereum via the CCTP TokenMessengerMinterV2, and purchased 129,000 ETH, splitting them across multiple wallets. Related Reading: Bitmine’s Ethereum Holdings Hits 4% Supply Milestone After 71,524 ETH Buy At the time, multiple investors and on-chain investigators urged Circle to freeze the funds, with crypto sleuth ZachXBT slamming the stablecoin issuer for its repeated “inaction” over the past few years. Circle has since addressed the backlash, affirming that it does not act “unilaterally or arbitrarily” and freeze funds when “the law requires us to act.” Drift concluded that “this is the first step toward making users whole over time and toward building back stronger than where we were before.” Featured Image from Unsplash.com, Chart from TradingView.com
Drift Protocol said it has secured up to $127.5 million from Tether to support user recovery after the April 1 exploit.
The money will be used by Drift to recover user funds after more than $270 million in clients assets were exploited this month, and will relaunch the protocol as a USDT-based perpetuals DEX on Solana.
Cantor Fitzgerald donated $10 million to a super political action committee backing pro-crypto candidates as election season ramps up.
The Stablecoin Development Corporation is a publicly-traded holding company with an approximately 2.15 billion SKY token treasury.
While Tether has been closely associated with the emerging political action committee, the opening funding came from Cantor Fitzgerald and Anchorage Digital.
The USDT stablecoin issuer has now accumulated over $7.1 billion in bitcoin as part of its strategy to recycle up 15% of its profit into BTC.
Tether has launched tether.wallet, a self-custodial crypto wallet supporting USDT, bitcoin, and tokenized gold.
The stablecoin issuer's crypto wallet lets users send digital dollars, tokenized gold and bitcoin without intermediaries or gas tokens across multiple blockchains.
The Fellowship PAC spent $300,000 with Nxum Group that was co-founded by Bo Hines, the chief of Tether's U.S. arm and former adviser to President Donald Trump.
The debate over stablecoin rewards seems to be the final stumbling block to Congress passing the Clarity Act.
Kulipa helps fintechs and wallets issue white-label stablecoin payment cards without managing card operations themselves.
Tether has let go of two former HSBC metals traders months after hiring them to build out its gold trading desk.
The bank maintained its $2 trillion stablecoin market cap forecast by 2028 amid a sharp increase in turnover from use cases like AI payments.
Tether previously relied on monthly attestations from BDO Italia, which fall short of the full audit now planned with KPMG.
FT identifies KPMG as auditor as stablecoin giant eyes fundraising and expansion under new U.S. rules
USDT0 tokens are minted using LayerZero's Omnichain Fungible Token standard and maintain a 1:1 backing with USDT.
Circle shares fell about 20% on Tuesday amid reports that draft provisions in the CLARITY Act could limit rewards.
The supply of non-USD stablecoins hit $1.1 billion in February, while aggregated transfer volume surged over 1,600%.
Bitget Wallet launched the Onchain Payments Matrix, connecting Ripple, Mastercard, and Tether within a global stablecoin payments network.
The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.
Circle Internet Financial, the issuer behind the USDC stablecoin — the second-largest dollar-pegged cryptocurrency — saw its stock, CRCL, tumble 22% on Tuesday to $98 as lawmakers reportedly moved to tighten rules around stablecoin yields. The selloff followed reports that a revised draft of the Senate Banking Committee’s CLARITY Act would broadly prohibit platforms from offering yield “directly or indirectly” for holding stablecoins or assets that function like bank deposits. Circle Revenue Model At Risk? The proposed restriction, reported by Crypto in America journalist Eleanor Terrett, is written to cover digital-asset service providers and their affiliates — exchanges, brokers, and similar firms — in an effort to close potential workarounds. Under the draft language, firms would be barred from providing anything “economically or functionally equivalent” to interest on stablecoin holdings. Related Reading: Bitcoin Expert Predicts ‘Golden Entry Window’ For Next Bull Market In October 2026 If they were to materialize over the long term, the implications for Circle would be immediate and substantial. Circle derives approximately 96% of its revenue from interest earned on USDC reserve assets. If platforms are prevented from offering yield or if demand for USDC softens because consumers and institutions cannot earn returns, Circle’s core revenue stream could be materially weakened. The fallout was not limited to Circle. Coinbase (COIN), the largest US-listed crypto exchange, also experienced significant pressure, trading down roughly 21% to about $179 at the time of writing. Tether’s Big‑Four Audit Move In a Tuesday post on the social media platform X, Terrett also pointed out that Tether’s latest move may have amplified the crash in Circle’s stock. Circle’s competitor recently announced that it had hired a Big Four accounting firm to audit its USDT reserves for the first time. Related Reading: Strategy Discloses $42 Billion Fundraising Plan To Hit 1 Million Bitcoin Target By End Of 2026 Tether framed the engagement as a major step toward enhanced transparency and regulatory readiness, saying the audit would provide “deep assurance that USDT is fully backed, highly liquid, and operated with world-class risk management.” Featured image from OpenArt, chart from TradingView.com
Tether has hired a Big Four accounting firm for its first full USDT stablecoin audit after years of scrutiny over its reserves.
PayPal has expanded access to its PYUSD stablecoin to 70 markets, enabling wallet access, transfers, and rewards for eligible users.
Circle’s USD Coin (USDC) has officially unseated Tether’s USDT in transfer volume for the first time in seven years. The shift marks a defining moment for digital assets, cleanly splitting stablecoin leadership into two distinct categories: total supply and transactional velocity. While Tether remains the undisputed heavyweight in the stablecoin market, USDC has become the […]
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Japanese investment bank Mizuho remains neutral on Circle, but lifted it price target to $120 from $100.
USDC is the more popular option when it comes to everyday, real-world applications, the research analysts said.
The issuer behind the USDT stablecoin joined a $5.2 million funding round for Ark Labs, backing software that could let stablecoins move and settle on Bitcoin rails.
The funding coincides with Arkade adding support for digital assets, including infrastructure designed for stablecoins like USDT on Bitcoin.