Yala’s Bitcoin-backed stablecoin YU briefly crashed to $0.20 after an attempted attack

Yala, the issuer of the Bitcoin-backed stablecoin YU, has suspended some of its product functions after what it described as an “attempted attack” that sent its token plunging from its dollar ￰0￱ incident, which was brought to the notice of the public on X, left the YU stablecoin under pressure on Sunday after its value dropped as low as $0.2046, before partially ￰1￱ team said all user funds remained safe and that Bitcoin deposits on the protocol remained either self-custodial or stored in ￰2￱ under pressure Yala confirmed that the disruption briefly destabilized YU’s peg, prompting the temporary suspension of its Convert and Bridge ￰3￱ services remain unaffected, according to the team.

“We’ve identified issues and, as a precaution, paused some product ￰4￱ wait for our green light before re-engaging,” Yala wrote on X . “All user assets remain safe. We’re focused on reinforcing stability and making the protocol even more robust,” it wrote in a previous post on ￰5￱ protocol is working with blockchain security firm SlowMist and other partners to investigate the incident and reinforce ￰6￱ added that a full post-mortem and action plan would be released once the review is ￰7￱ refutes exploit claims While Yala has described the episode as an “attempted attack”, on-chain data provided by blockchain analytics firm Lookonchain says otherwise, as the exploit looks ￰8￱ attacker was able to mint 120 million YU tokens on ￰9￱ to on-chain data, 7.71 million YU was bridged to Ethereum and Solana, where it was exchanged for $7.7 million in ￰10￱ funds were subsequently swapped into 1,501 ETH and dispersed across multiple ￰11￱ added that the attacker still controls 22.29 million YU on Ethereum and Solana, while another 90 million YU remains on Polygon, ￰12￱ allegations, if confirmed, would indicate a significant vulnerability in Yala’s cross-chain ￰13￱ has so far refrained from confirming any losses, insisting that no user funds were compromised and reiterating that its Bitcoin reserves remain ￰14￱ stability in question YU is designed as an over-collateralized Bitcoin-backed stablecoin intended to hold parity with the US ￰15￱ token, with a market capitalization of roughly $140 million as of the time of writing, trades on decentralized exchanges but has limited liquidity, with just $339,000 in USDC liquidity in its Ethereum pool, according to DEX ￰16￱ is currently trading around $0.7836 ￰17￱ USDC liquidity pool on Solana is relatively better, trading at $0.9997, with a liquidity pool of $14.9 ￰18￱ its worst, YU dropped below $0.2046 but rebounded to $0.91 before sliding again, and it’s currently priced at $0.9259 according to CoinMarketCap as at the time of ￰19￱ incident comes amid the rapid expansion of the global stablecoin ￰20￱ to data from CoinMarketCap, the market briefly touched $300 billion this month, driven largely by the dominance of Tether’s USDT , Circle’s USDC, and newer entrants such as Ethena Labs’ USDe making it to the top three ￰21￱ Yala, the challenge now lies in restoring YU’s peg and rebuilding trust among ￰22￱ also has to fix the technical flaws that made its platform vulnerable to the ￰23￱ Difference Wire helps crypto brands break through and dominate headlines fast