Key Takeaways:
- YU stablecoin, backed by Bitcoin, dropped as low as $0.2046 after an attempted exploit and has yet to fully regain its $1 peg.
- The attacker allegedly minted 120M YU, bridged and sold 7.71M for USDC, and converted funds into ETH across multiple wallets.
- Yala paused key functions and is working with SlowMist on an investigation, with a full post-mortem pending.
Yala’s Bitcoin-backed stablecoin YU has come under pressure after an attempted exploit triggered a sharp depeg.
The token, designed to maintain a $1 value, collapsed to $0.2046 before partially recovering.
Our protocol recently experienced an attempted attack that briefly impacted YU’s peg. Thanks to the quick collaboration with @SlowMist_Team and our security partners, we’ve identified the issue and are already rolling out improvements to strengthen the system.
— Yala (@yalaorg) September 14, 2025
All user assets…
According to Yala, the event “briefly impacted YU’s peg,” but user funds remain secure.
The platform stated that all Bitcoin collateral is either self-custodial or stored in vaults, with none lost.
To mitigate risks, Yala paused its Convert and Bridge functions, though other protocol operations remain unaffected.
Blockchain security firm SlowMist and other investigators are assisting Yala in reviewing the breach.
On-chain analysis by Lookonchain indicated that an attacker minted 120 million YU on Polygon, bridged 7.71 million YU to Ethereum, and sold it for 7.7 million USDC.
A hacker minted 120M $YU on Polygon and then sold 7.71M $YU for 7.7M $USDC on Ethereum and Solana via cross-chain.
— Lookonchain (@lookonchain) September 14, 2025
The hacker still holds 22.29M $YU on Solana and Ethereum, with another 90M $YU still on Polygon that has not been bridged.
The hacker has now exchanged 7.7M $USDC… pic.twitter.com/508QU96DpF
The funds were reportedly converted to 1,501 ETH and dispersed across wallets.
The attacker is believed to still hold 22 million+ YU across Ethereum and Solana, with another 90 million YU unbridged on Polygon.
Despite a reported $119 million market cap, YU’s Ethereum liquidity is just $340,000 USDC.
At the time of writing, YU trades around $$0.11, with a full post-mortem and action plan expected soon.
About The Author
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