Tether extends $127.5 million in funding to crypto platform Drift as critics blast rival Circle for failing to freeze hacked funds

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’