December didn’t start off well for crypto. Right out of the gate, big tokens tumbled. Bitcoin, Ethereum, and a bunch of altcoins all slid hard during the Monday morning rush in Asia. Why? Yearn Finance dropped news of an “incident” in its ETH liquidity pool, and that was enough to spook traders. The mood had already been sour in late November, but this just made things worse.
BTC, ETH, and Altcoins Take a Hit After DeFi Exploit
Bitcoin dropped over 3%, trading close to $87,000, and Ethereum lost 5%. It wasn’t just the big names—SOL, DOGE, and XRP all lost more than 4%, according to CoinDesk. Things got ugly after Yearn Finance said someone had been messing with their yETH pool, although they stressed their V2 and V3 vaults are still safe.
So, here’s what happened: the attacker found a loophole and managed to mint a ton of yETH in just one transaction. After that, they drained the pool and walked away with about 1,000 ETH—roughly $3 million. Then they ran that money through crypto mixers. For context, yETH is basically a token backed by different Ethereum liquid staking assets. All in all, the protocol took a $9 million hit. Out of that, 1,000 ETH ended up in Tornado Cash, and security firm PeckShield says the attacker’s wallet still holds around $6 million in tokens.
This latest hit just adds to the growing anxiety around DeFi’s security problems. It comes right after Upbit’s big breach and really highlights how fast institutional money is pouring in while the tech meant to keep it safe just isn’t keeping up.
Liquidations, Outflows, and More Pain Across the Market
The sharp sell-off led to over $400 million in liquidations for leveraged futures positions, mainly wiping out longs. Traders weren’t ready for the drop, and it showed. November ended on a rough note—Bitcoin fell 17.5%, its worst month since March, and Ether plunged 22%, the biggest drop since February.
Big investors pulled back too. Spot Bitcoin ETFs listed in the US saw $3.48 billion in net outflows last month. Ether ETFs weren’t spared either, with a record $1.42 billion in redemptions. Heading into December, the market’s feeling pretty shaky.
