Crypto markets opened December 2025 on a sour note. A security breach at Yearn Finance wiped out over $140 billion in total capitalization, sending major coins into a tailspin. Bitcoin, Ether, and XRP led the declines, as traders reacted to fresh concerns about DeFi protocol safety.
Inside the Yearn Finance Exploit
The trouble started late on November 30, 2025, when an attacker targeted Yearn Finance’s yETH token, a bundle of liquid-staked Ethereum variants. By exploiting a flaw in an outdated contract, the hacker minted trillions of yETH tokens in one go.
This allowed them to empty linked liquidity pools on Balancer and Curve, netting about $9 million in stolen assets. Roughly $8 million came from the primary stableswap pool, with the rest from smaller sources.
Yearn Finance quickly confirmed the attack, stressing that it affected only the legacy yETH setup. Newer V2 and V3 vaults stayed secure, with no user funds at risk beyond the drained pools. Still, the hacker moved fast, swapping the fake tokens for real ETH and other cryptos.
They then funneled around 1,000 ETH worth about $3 million through Tornado Cash, a tool that mixes transactions to hide origins. PeckShield, a blockchain security firm, tracked the exploiter’s wallet, which held another $6 million in assets post-attack.
Community and Security Response
Word spread rapidly on social platforms. Security alerts from firms like GoPlus detailed the 30-minute operation, from setup to escape. Community voices, including analysts on X, called for stronger AI-based monitoring to spot such flaws early.
This incident echoes past DeFi hacks, where code errors led to massive drains, reminding users of the sector’s high-stakes nature.
Price Impacts Across Major Assets
The fallout hit prices hard. Bitcoin sank more than 4%, dipping below $87,000 before stabilizing around $86,000 in Asian trading. Ether, deeply linked to DeFi, dropped 5% to 6%, falling under $2,900. XRP followed suit with 4% to 7% losses, while altcoins like Solana and Cardano shed 7% to 8%. Overall, the crypto space saw over $573 million in liquidations, fueled by low weekend volume and overleveraged bets.
