Tether has used its hundreds of billions in assets to become many things, including social media investors, data center lenders, and one of the largest holders of U.S. T-bills. But this week, Tether became something else: a crypto startup’s lender of last resort. The stablecoin giant put up $127.5 million in funding—some in loans, some in grants—to aid the recovery of Drift, a Solana-based derivatives exchange that was pilfered for $285 million by North Korea–linked hackers earlier this month.
While the funds won’t cover the full amount that Drift lost in the hack, the money will provide additional stability as the exchange has said it will also begin contributing its own revenue in a bid to make users whole.
Tether’s involvement in the recovery plan has won it plaudits from crypto fans, particularly users of the blockchain Solana, on which Drift is built. Meanwhile, that goodwill may come at the expense of Tether’s chief rival, Circle, whose USDC stablecoin has long been the most popular on Solana and Drift. Tether and Drift did not immediately return requests for comment.
A ‘moral quandary’
While hacking is hardly uncommon in the crypto world, the Drift breach was particularly sophisticated. The hackers, thought to be working on behalf of the DPRK, approached Drift team members at a cryptocurrency conference in late 2025 and pretended to be from a trading firm looking to build on the blockchain protocol. Eventually, they won sufficient trust to gain deeper access to Drift’s systems, opening the door to steal funds, the company said in a statement.
As part of the scheme, the hackers converted their stolen funds, which represented numerous cryptocurrencies, into USDC before whisking the tokens off the Solana blockchain.
Following the breach, many Drift customers have been pointing their fingers at Circle, claiming the firm saw the hack taking place but failed to freeze the USDC, which could have prevented the hackers from making off with the stolen funds.
Circle CEO Jeremy Allaire reportedly said a private company freezing user funds at its own discretion would create a “moral quandary,” adding that Circle freezes assets only at the direction of law enforcement or the courts. Reached for comment, Circle sent a blog post from one of its executives on the topic of asset freezing.
Tether, meanwhile, appears to have used the episode to gain goodwill at the expense of its rival. Nicky Scannella, lead for the Solana marketing group Superteam USA, swapped $45,000 of USDC for Tether’s USDT stablecoin following the news of Tether’s Drift gift.
“The best way to reward [Tether’s] behavior and punish [Circle’s] behavior is to swap,” Scannella said in a text. “If we want to see more of this…we as users need to actually act. It’s sorta like voting.”
USDC and USDT showed a marginal loss and gain, respectively, in supply on the Solana blockchain in the day following Tether’s announcement, per DefiLlama data. Still, USDC has around $8.1 billion in Solana stablecoin supply to USDT’s $3 billion—though Tether’s coin remains the dominant overall stablecoin with a market cap of $185 billion compared to Circle’s $78 billion.
Tether also gained a new client through the ordeal. Drift will use USDT, rather than USDC, for settlement when the exchange relaunches, the company said in a statement.
