Circle's No-Freeze Stance on Drift Hack Funds Defended by ARK Invest Analyst

Circle, the issuer of the widely used stablecoin USDC, is facing backlash for its decision not to freeze funds stolen in a recent hack on the Solana trading protocol Drift. The incident saw hackers move millions of dollars' worth of USDC through Circle's own bridge, leading to a lawsuit being filed against the company.

An analyst from ARK Invest has come out in defense of Circle's stance, arguing that freezing the funds without a legal order could have had severe consequences for the entire crypto ecosystem. According to Lorenzo Valente, director of research at ARK Invest, such an action would have created a 'domino effect' across decentralized exchanges (DEXs), bridges, oracles, and even wallets.

'One unilateral freeze by Circle could trigger a domino effect,' Valente said. 'This would lead to a situation where platforms like Circle may end up doing what could constitute theft from people who had nothing to do with the original crime.'