Major Cryptocurrencies Slide as Yearn Exploit Shakes Market

Major cryptocurrencies traded lower in early Asian markets on Monday after decentralized finance (DeFi) platform Yearn Finance reported an “incident” in its yETH pool, extending a painful November sell-off.

Bitcoin (BTC), the world’s largest cryptocurrency by market value, fell more than 3% to around $87,000 during early trading hours. Ethereum (ETH) dropped 5%, while Solana (SOL), Dogecoin (DOGE), and XRP all fell over 4%, according to CoinDesk data.

The sell-off intensified following Yearn’s X alert, which noted a problem in the yETH liquidity pool but reassured users that its V2 and V3 Vaults remained secure. Social media and blockchain security reports suggested that an attacker exploited a vulnerability to mint a large amount of yETH in a single transaction, draining the liquidity pool and stealing roughly 1,000 ETH (around $3 million), which was routed through mixers.

YETH is a user-governed liquidity pool token composed of various Ethereum Liquid Staking Derivatives (LSTs). According to blockchain security firm PeckShield, the protocol lost $9 million in the exploit, with 1,000 ETH transferred to Tornado Cash and the attacker’s address retaining approximately $6 million in tokens.

The Yearn incident comes just days after major Korean exchange Upbit suffered a multi-million dollar hack, highlighting persistent vulnerabilities in crypto security despite inflows from institutional investors.

The early Asian session downturn triggered over $400 million in liquidations of leveraged crypto futures, primarily affecting long positions, according to Coinglass, suggesting many traders betting on a rebound were caught off guard.

November ended with steep losses: Bitcoin dropped 17.5% for the month, its worst decline since March, despite a late-month recovery from nearly $80,000 to over $90,000. Ethereum fell 22%, marking its worst monthly performance since February.

Institutional demand also weakened significantly. U.S.-listed spot BTC ETFs saw $3.48 billion in net outflows in November, the second-largest redemption on record, while Ether ETFs posted a record $1.42 billion in outflows, according to SoSoValue.

The Yearn exploit and broader market weakness underscore ongoing challenges in crypto security and highlight how institutional inflows have boosted valuations without fully addressing risk.