- Bitcoin and Ethereum prices dropped early Monday amid concerns over a security breach at Yearn Finance.
- Yearn Finance reported an incident involving its yETH liquidity pool, with about 1,000 ETH (~$3 million) reportedly stolen through a vulnerability exploited by an attacker.
- Major cryptocurrencies fell between 3% and 5%, triggering over $400 million in leveraged futures liquidations, mostly from long positions.
- November was a difficult month for crypto assets, with Bitcoin losing 17.5% and Ethereum dropping 22%, along with significant ETF outflows.
On Monday, major cryptocurrencies including Bitcoin and Ethereum declined sharply amid new concerns about security in decentralized finance. Bitcoin (BTC) fell more than 3% to about $87,000 during early Asian trading, while Ethereum’s native token (ETH) dropped 5%, according to CoinDesk data. Other tokens such as Solana (SOL), Dogecoin (DOGE), and Ripple (XRP) lost over 4%.
The sell-off intensified after Yearn Finance posted an alert on its social media channel flagging an “incident” linked to its yETH liquidity pool. The platform assured that its V2 and V3 Vaults remained secure and unaffected.
Social media reports suggested that an attacker exploited a flaw to mint large amounts of yETH tokens in a single transaction. This action drained liquidity and resulted in the loss of approximately 1,000 ETH, valued near $3 million, which was then routed through mixers to obscure its origin. YETH tokens represent a governance-controlled liquidity pool aggregating various Ethereum Liquid Staking Derivatives (LSTs), as mentioned on WuBlockchain’s Twitter.
This incident follows a recent multi-million-dollar hack targeting South Korean exchange Upbit. It highlights ongoing challenges in securing crypto networks, despite growing institutional participation boosting overall market valuations.
The early trading session losses triggered more than $400 million in liquidations of leveraged crypto futures, primarily affecting traders holding long positions, data from Coinglass shows. Many investors had anticipated a price recovery and were caught off guard by the downturn.
For November, Bitcoin ended with a 17.5% loss, the largest since March, despite a late-month rally from nearly $80,000 to over $90,000. Ethereum experienced its worst monthly decline since February, falling 22%.
Declining institutional interest contributed to the weak performance. Spot BTC exchange-traded funds (ETFs) listed in the U.S. saw net outflows of $3.48 billion in November, marking the second-largest redemption on record. Ether ETFs recorded record outflows of $1.42 billion, according to SoSoValue data.
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