🧠 Food for thought

Implications, context, and why it matters.

Circle’s choice not to freeze stolen USDC set the stage for Drift’s switch to USDT

• Drift moved from USDC after backlash over Circle’s response to a hack. Attackers transferred about US$232 million in USDC from Solana to Ethereum through Circle’s cross-chain transfer protocol (CCTP), a tool for moving USDC between blockchains 1.
• Circle says it freezes USDC wallets only after direction from law enforcement or courts. It does not freeze funds in real time during hacks or exploits 1.
• Tether has frozen tokens tied to hacks or other illegal activity in the past. Reports describe it as faster to lock funds than Circle 1.

Tether’s ability to freeze funds is becoming a selling point in the stablecoin fight

• The Drift move lands during a tougher contest among stablecoin issuers. CoinDesk data says USDC is gaining share, while USDT still leads by supply 1.
• When Tether announced the Drift collaboration, it cast itself as an “ecosystem backstop” during a major crisis. In a separate statement, Tether said it has frozen more than US$2.5 billion in USDT tied to illicit activities 2.
• Some crypto trading platforms factor a stablecoin issuer’s readiness to freeze funds into settlement-asset choices. Drift has not publicly said that this was the main reason for its decision 13.