ZachXBT Says Circle Didn't Freeze $230M in USDC Tied to Drift Protocol Exploit

A fresh security incident hit crypto over the past 24 hours. Drift Protocol (DRIFT), a Solana (SOL)-based DeFi app, was exploited for roughly $285 million across multiple assets, including Circle's USDC. The event has reignited scrutiny of Circle, which is already facing criticism over its handling of wallet freezes. A week ago, Circle froze 16 wallets showing what it described as clear business transactions after acting on a request that contained errors. Since then, the company has begun unfreezing some of those wallets. Blockchain investigator ZachXBT now ties Circle's response to the Drift incident, alleging the company failed to freeze $230 million in USDC linked to the exploit. According to ZachXBT, the funds were bridged from Solana to Ethereum (ETH) using CCTP. He said Circle had about six hours to act, accusing the firm of "sleeping" while more than 100 transactions occurred, including activity continuing three hours after the hack. He also criticized Circle and CEO Jeremy Allaire as "bad actors" for the industry. Some users questioned why a major DeFi application lacked dedicated monitoring. ZachXBT responded that Circle leans on labels such as "compliance" and "regulated" without fully implementing the operational controls those terms imply. Fallout spread across Solana DeFi. SolanaFloor reported that around 11 protocols paused most activity in the wake of the exploit, with Ranger Finance reporting a $900,000 loss. The Solana Foundation's Chief Product Officer said the issue was isolated and not representative of Solana DeFi broadly, adding that the community would rebuild quickly. In markets, Circle stock (CRCL) extended a decline that began after the first acquisition seven days ago. The shares remained above a prior higher high around $90, though the latest headlines were cited as a potential risk for a breakdown. Technical indicators also pointed to outflows: the Money Flow Index (MFI) fell to 19, suggesting oversold conditions, while Bull Bear Power (BBP) indicated sellers were in control. ZachXBT's core claim is that Circle did not freeze $230 million in USDC bridged from Solana to Ethereum after the Drift exploit, even as Solana Foundation leadership sought to reassure users and Circle's stock continued to slide.