Bitcoin, Ethereum & XRP Crash as December Opens: Yearn Finance Hack Triggers $400M Liquidations

 

The crypto market opened December in red as Bitcoin, Ethereum, and XRP tumbled following a Yearn Finance exploit draining $9M from the yETH pool. The incident triggered over $400M in liquidations and renewed concerns about DeFi security, institutional outflows, and market stability.

The crypto market started December with another wave of volatility as major cryptocurrencies — Bitcoin (BTC), Ethereum (ETH), XRP, SOL, and DOGE — dropped sharply in early Asian trading hours. The downturn followed breaking news from decentralized finance (DeFi) protocol Yearn Finance, which reported an "incident" involving its yETH liquidity pool, triggering widespread panic and accelerating sell-offs across the market.

Within hours, Bitcoin slid over 3% to trade near $87,000, while Ethereum dropped 5%, and other altcoins followed with losses exceeding 4%. This decline extended the negative sentiment that dominated late November, which already recorded aggressive sell-offs, slowing institutional inflows, and increased market uncertainty.

🔍 What Triggered the Market Crash?

According to blockchain security insights, the sharp drop was triggered by a major exploit in the Yearn Finance yETH liquidity pool, where the attacker allegedly minted a large amount of yETH tokens in a single transaction and drained the pool.

Key Details of the Exploit

Category	Details
Affected Protocol	Yearn Finance (yETH Pool)
Value Lost	$9 million worth of assets
Stolen ETH	1,000 ETH (~$3M) routed through Tornado Cash
Attacker Holdings	~ $6 million retained after transfers
Security Status	Yearn V2 & V3 vaults safe
Source of Issue	Smart contract vulnerability & liquidity manipulation

Security analysts from PeckShield confirmed that the attacker’s wallet (0xa80d...c822) executed the exploit and moved funds through mixers to obscure transaction trails.

What began as an isolated DeFi vulnerability rapidly escalated into market-wide fear — a common pattern during periods of leveraged positions and already fragile market confidence.