Drift Protocol: The $295M Hack That Began With a Fake Trading Firm

At 16:05 UTC on 1 April 2026, a transaction on the Solana blockchain handed control of Drift Protocol to a stranger. One second later a second transaction confirmed it. Within about twelve minutes the main vaults of Solana's biggest futures exchange were empty, and Drift's users, who had trusted it with more than half a billion dollars, were locked out of what was left.

Drift's first post on X had to include a line nobody wants to write on 1 April: "This is not an April Fools joke." Early estimates put the loss at $285 million. By 30 September the Drift Foundation, the non-profit that now speaks for the project, had settled on roughly $295.4 million. It is the largest theft from a Solana application since Wormhole lost about $320 million in 2022, and in 2026 only the $387.5 million Bitget theft in September has been bigger.

Drift was founded in 2021 by Cindy Leow and David Lu. It was a perpetual futures exchange: a market where traders bet on the price of Bitcoin, Solana or a meme coin with borrowed money and no expiry date, much like a spread-betting account that never has to be closed. Unlike a broker, Drift held no customer accounts in an office. Its rules ran as smart contracts, code that moves money by itself, and customer deposits sat in shared vaults on Solana. Before the attack DefiLlama, which tracks how much money each crypto app holds, put Drift at about $550 million. By the evening of 1 April it was under $250 million.

The trading firm that never was

The theft did not begin with code. According to Drift's own post-mortem, it began at a crypto conference in the autumn of 2025, when a group presenting itself as a quantitative trading firm approached Drift contributors and said it wanted to build on the platform. A Telegram group was set up the same day. Over the next six months the "firm" met Drift people in person at conferences in several countries, talked trading strategy, and by December 2025 had opened an Ecosystem Vault on Drift with more than $1 million of its own money. It looked like a client. It behaved like a client.

Then it asked for help. One contributor opened a code project the group shared, supposedly to build a website for its vault. The project was booby-trapped: a settings file in Microsoft's VSCode editor ran hidden code the moment the folder was opened. A second contributor was persuaded to beta-test a wallet app through Apple's TestFlight. Drift believes both devices were quietly compromised. On 1 April the group's Telegram went dark and the malware deleted itself.

On-chain records show the attacker was preparing in parallel. On 11 March 2026 it withdrew 10 ETH from Tornado Cash, a mixing service that blends deposits so they cannot be traced. On 12 March it created a worthless token called CarbonVote Token (CVT), kept about 80% of the supply, seeded a trading pool with roughly $500, and traded it back and forth with itself to hold the price near $1.

How two signatures emptied the vaults

Drift's emergency powers sat with a Security Council: five people, any two of whom could sign an admin instruction together, like a company account that needs two directors to approve a payment. In late March the council was moved to a new two-of-five setup and its timelock, a built-in delay that would have given everyone time to spot a hostile instruction before it took effect, was set to zero.

The attacker used a Solana feature called a durable nonce. Normally a signed Solana transaction expires within about a minute. A durable nonce keeps it valid indefinitely, like a signed cheque with no date that can be cashed whenever the holder chooses. Between 23 and 30 March, two council members were led into signing transactions they did not fully understand, a practice known as blind signing because the screen shows a string of code rather than plain words. The attacker obtained signatures from both the old council and the new one. The signed transactions sat unused for more than a week.

On 1 April they were cashed. The first proposed transferring admin control to an attacker address; the second executed it. With admin rights the attacker switched on CVT as acceptable collateral, raised borrowing limits, removed withdrawal limits and deposited 500 million CVT. Drift's price feed, which the attacker also controlled, valued that pile at about $500 million. The attacker then borrowed against it, the way a fraudster might pledge forged shares for a bank loan, and walked off with the real assets.

What was taken, and who else got hurt

Chainalysis counted at least 18 different tokens. The largest items were about $159 million of JLP, a share in the pool that backs Jupiter's futures exchange, $71 million of USDC, the dollar-backed stablecoin issued by Circle, $11.3 million of Coinbase's wrapped Bitcoin (cbBTC), $5.6 million of Tether's USDT, $4.7 million of wrapped Ether, $4.4 million of wrapped Bitcoin (WBTC) and $4.1 million of the meme coin Fartcoin. Draining of smaller positions continued for about two and a half hours; no automatic circuit breaker stopped it.

The damage spread. Chainalysis said at least 20 other Solana projects that had money in Drift or depended on its prices paused or reported losses. The DRIFT token, which had traded at $2.65 in November 2024, fell below five cents. Two audits, by Trail of Bits in 2022 and ClawSecure in February 2026, had checked the code. Neither was asked to check the people who held the keys.

Who those people really were, and how the money left Solana through Circle's own bridge while Circle did nothing, is a separate story. Mandiant, the Google-owned investigator Drift hired, later attributed the attack to a North Korean group it calls UNC6862.

One cent on the dollar

Drift's answer was to rebuild under a new name. On 16 April Tether, issuer of the USDT stablecoin, committed up to $127.5 million to a relaunch and user recovery, and other partners pledged up to $20 million more. Both are ceilings, paid in over time and matched to the new exchange's revenue, not cash in a bank. In July Drift rebranded as Velocity, swapped Circle's USDC for Tether's USDT as its settlement currency, and opened a private beta capped at $10,000 per user. The whitelist was dropped on 21 September, and on 29 September co-founder Cindy Leow announced she was stepping down, handing the exchange to a new team while David Lu continues to work on asset recovery with law enforcement.

On 1 October victims could finally claim. Each receives one DFX recovery token per dollar of verified loss, nearly 299.5 million in all. The recovery pool held about $3.11 million, so each DFX could be redeemed for about 1.04 cents. Velocity has promised 60% to 90% of its net revenue to the pool; on day one that added 31 dollars. A further $9.2 million of stolen money is frozen but cannot be released without a law enforcement order. Unclaimed DFX will be burned on 1 January 2028.

The attacker's three main wallets still held 107,165 ETH, worth close to $286 million, at the start of October.