Yala (YU) stablecoin loses peg to the dollar after attack

The project team said that user assets are safe

Yala’s YU stablecoin drops below $0,3 after a hacker attack

15.09.2025 - 10:50

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3 min

Key points:

The YU stablecoin fell sharply to $0,2 after an attempted attack on the protocol.
To prevent further instability, Yala disabled the conversion and bridge functions.
After recovery, YU is trading at $0,9212, below the planned level of $1.

The bitcoin-backed stablecoin Yala (YU) failed to restore its peg to the dollar after an attack on the protocol: the token’s price plummeted to $0,2046.

The Yala team confirmed the incident in a post on X, noting that it “briefly impacted YU’s peg.” The team added that it is working with blockchain security firm SlowMist and other security partners to investigate the incident:

Update: All funds are safe. Bitcoin deposited to Yala remains self-custodial or in vaults, with none lost. We’ve identified issues and, as a precaution, paused some product features. Please wait for our green light before re-engaging.”

Spurce: x.com

To prevent further instability, Yala has disabled the conversion and bridge functions. The rest of the protocol’s functions are operating as usual, and user assets are safe.

How the attacker operated

According to Lookonchain, the hacker exploited a vulnerability in the protocol by releasing 120 million YU tokens on Polygon. They then bridged and sold 7,71 million YU for 7,7 million USDC via Ethereum and Solana. The attacker converted the proceeds into 1501 ETH and distributed them across several wallets, while retaining 112,29 million unbridged YU tokens.

Source: x.com

With a market capitalization of $141 million, the liquidity of the YU pool in Ethereum is only $340 000 in USDC. After a brief recovery to $0,917, the stablecoin is trading at around $0,9212 — below its planned peg to $1.

Earlier, the analytical company Hacken published a report on Web3 security for 2025: in just six months, the crypto industry lost more than $3,1 billion due to hacks and fraud.

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