What is Tether’s $150M recovery plan for Drift Protocol?

Tether is backing a $150 million recovery programme to help restore user funds after Drift Protocol suffered a $280 million exploit. Tether is contributing $127.5 million, with the rest coming from partners. The goal is to support users as the platform resumes operations.

How will Drift Protocol repay users after the hack?

User repayments will be tied to ongoing trading activity rather than a full upfront payout. As the platform restarts and generates revenue, funds will be gradually restored. This spreads the recovery over time instead of immediate reimbursement.

Why is Tether supporting Drift Protocol?

Tether is stepping in to stabilise a major decentralised exchange and help rebuild trust in the ecosystem. Supporting recovery efforts also strengthens its position in the market. It reflects a broader trend of industry players intervening after major hacks.

What happened in the Drift Protocol hack?

Drift Protocol was exploited for around $280 million earlier in April. The attacker moved large amounts of funds across blockchains. The incident disrupted operations and triggered the need for a recovery plan.

Why is Drift switching from USDC to USDT?

Drift will replace USDC with USDT as its settlement asset as part of the relaunch. This aligns the platform more closely with Tether after its financial support. It may also reflect concerns raised about USDC handling during the exploit.

What criticism did Circle face after the hack?

Circle was criticised for not freezing USDC funds linked to the attacker. Over $230 million was moved across chains without intervention. This raised questions about response times and risk controls.

How did Circle’s stock react to the incident?

Circle’s shares fell about 10% after the criticism and analyst downgrades. However, the stock later rebounded around 20%. This shows how sensitive investors are to security issues in crypto infrastructure.

What does this mean for crypto investors?

This highlights the ongoing risks of hacks and platform vulnerabilities. However, it also shows increasing industry coordination to protect users. Investors should factor in both risk and recovery mechanisms when evaluating platforms.

Cryptocurrency

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Tether backs $150M Drift recovery plan

Written by Liezl GambePublished Apr 17, 2026, 12:00 AM

Tether has committed $150 million to support the recovery of Drift Protocol after a $280 million exploit disrupted the decentralised exchange earlier this month.

The stablecoin issuer will contribute $127.5 million to the programme, with additional funding from partners, as part of a plan to restore user balances as trading resumes.

“Rather than relying on upfront capital alone, the structure links funding and recovery to ongoing trading activity on the Drift platform, allowing user balances to be restored as the exchange returns to normal operations,”

Tether said.

Drift Protocol will also switch its settlement asset from USDC to Tether’s USDt as part of its relaunch strategy following the breach.

The recovery initiative reflects a broader industry trend of collaborative responses to major hacks, as platforms seek to rebuild trust and resume operations after large-scale losses. Following the announcement the Tether position was unchanged at $XX.

The exploit also drew scrutiny toward Circle after the attacker moved more than $230 million in USDC across chains without funds being frozen, sparking criticism from industry analysts.

Circle’s shares fell about 10% following the incident before rebounding roughly 20%, highlighting ongoing market sensitivity to security lapses in crypto infrastructure.