‘Circle had 6 hours to freeze funds’ – ZachXBT slams CEO after DRIFT hack
Explaining why ZachXBT accused Circle of failure to protect customers.
In the past 24 hours, another security threat has occurred in crypto. Drift Protocol [DRIFT], built on the Solana [SOL] blockchain, lost about $285 million in a hack that stole several coins, including stablecoins like Circle’s USDC.
Circle is currently undergoing its second fix, just a few days after facing accusations of failing to protect customers. A week ago, they froze 16 wallets that showed clear business transactions after a request that had errors.
However, they have since started to unfreeze some of these 16 wallets.
With the incident proving some level of incompetence, another accusation by ZachXBT has arisen, linking it with the Drift Protocol hack.
ZachXBT accuses Circle of failure to protect customers
As per ZachXBT, Circle Protocol [CRCL] failed to freeze $230 million USDC from the exploit. The amount was bridged from Solana to Ethereum [ETH] via CCTP. ZachXBT said,
6 hours is how long Circle had to freeze stolen funds from the $280M+ Drift hack.
The blockchain investigator accused them of sleeping while more than 100 transactions were happening, even though it was three hours after the hack incident. He labeled Circle and the CEO, Jeremy Allaire, as bad actors for the industry.
Users were wondering how such a well-known DeFi app did not have a special monitoring place. In response, ZachXBT said Circle uses buzzwords like “compliance” and “regulated” without actual implementation. He noted,
Who believes them unbeknownst of the problem
Impact on the broader crypto market
Meanwhile, several protocols had confirmed impacts following the Drift exploit, as per a post by SolanaFloor. About 11 protocols suspended most of their activity, with Ranger Finance losing $900K.
However, the Chief Product Officer at the Solana Foundation assured users of security and a bounce back for the whole chain. He clarified,
“This is an isolated incident and says nothing about Solana DeFi or any other Solana product…But I know the Solana DeFi community will pick up the pieces and rebuild fast as only Solana can.
For the broader crypto market, this incident raises concerns about the security of DeFi protocols and their position, even as regulations seek to curb malicious activities done through these protocols.
Circle stock extends its price decline
On the charts, Circle stock extended its decline that started after the first acquisition seven days ago. However, it is trading above the previous higher high at $90, but such news could lead to a breakdown.
Furthermore, CRCL was seeing capital leave as the Money Flow Index (MFI) dropped to 19. This indicated the stock was oversold, with Bull Bear Power (BBP) showing seller dominance.
Final Summary
- ZachXBT accuses Circle of not freezing the $230 million USDC bridge from Solana to Ethereum.
- Circle’s stock declined even though the Chief Product Officer at Solana assured users of a bounce back.
