Drift Provides Updated User Recovery Plan Following $290M North Korea Hack

Drift is taking the first step toward making users whole following a disasterous $290M+ DPRK-linked exploit, starting with the issuance of tokenized claims.

What's the Scoop?

• Disastrous Hack: On April 1, Drift was exploited for approximately $290M, the apparent result of a months-long months-long social engineering and infiltration campaign involving fake counterparties, compromised contributor devices, and frozen protocol functions, which was attributed to North Korean hackers.
• Tether Partnership: On April 16, Drift announced a partnership Tether and other unnamed entities, who proposed a nearly $150M backstop, encompassing a $100M revenue-linked credit facility, an ecosystem grant, and loans to market makers. As part of the partnership, Drift committed to pivoting away from Circle's USDC (who failed to freeze funds amid the exploit despite public outcry) and relaunching as a USDT-based perpetuals DEX.
• Recovery Plan: In its recovery plan announced today, Drift said it will issue a recovery token to users with verified losses, with each token representing $1 of stolen funds. These tokens can be used to claim funds out of a recovery pool, which has been seeded with ~$3.8M in protocol remaining assets, which have been converted to USDT. According to Drift's X post, "The pool will continue to grow every quarter through a substantial portion of the exchange's net exchange revenue, additional partner capital, and Tether's matched deployment (up to $127.5M committed)." Recovery token holders can claim funds at any time once the pool exceeds $5M, but redemptions are limited to a pro rata share of available funds at the time of withdrawal, meaning users who claim early forfeit their right to full recovery later. According to Drift, its insurance fund was not compromised in the exploit, and may become available to depositors pending DAO approval. It remains unclear when users can begin to even partially claim funds, when a full recovery will be achieved, or when promised partner contributions will be made.