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Yearn Finance’s yETH Experiences Significant Breach, Hackers Transfer $3 Million ETH to Tornado Cash
The DeFi platform Yearn Finance’s yETH product experienced an unlimited token minting incident on Monday, resulting in the depletion of the entire yETH pool in a single transaction.
Yearn subsequently acknowledged the “incident,” confirming that its V2 and V3 Vaults remain secure and unaffected.
We are looking into an incident related to the yETH LST stableswap pool.
Yearn Vaults (both V2 and V3) are not impacted.— yearn (@yearnfi) November 30, 2025
As per blockchain data, the exploit led to the creation of an almost limitless quantity of yETH, draining millions from Balancer pools. The attackers reportedly gained 1,000 ETH, valued at $3 million, which was funneled through the Tornado Cash mixer, as noted by Chinese journalist Colin Wu.
yETH serves as an index token that comprises various liquid staked versions of ETH, also referred to as Ethereum Liquid Staking Derivatives (LSTs). The attack was initially pointed out by an X user named Togbe, who drew attention to “heavy transactions” involving LSTs, including yearn, rocket pool, origin, and dinero.
yETH Incident Highlights DeFi Security Concerns
The incident seemingly involved multiple newly deployed smart contracts that self-destructed post-transaction, according to blockchain data. The total financial impact remains uncertain; however, the yETH pool had an estimated total value of around $11 million before the attack, as indicated by Dexscreener data.
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In the aftermath of the exploit, the community had mixed reactions, with some voicing concerns regarding the ongoing use of outdated contracts.
Additionally, Yearn Finance experienced a hack in 2021, which impacted its yDAI vault and resulted in a loss of $11 million in value. The hacker reportedly made off with $2.8 million at that time. Later, the protocol identified a faulty script in December 2023, which eliminated 63% of a position in its treasury.
Crypto Industry Faces $127M in Losses Due to Hacks and Scams in November
Meanwhile, blockchain security firm CertiK confirmed on Sunday that the cryptocurrency sector incurred an estimated $127 million in losses due to hacks and exploits.
The company’s monthly threat report indicated that the total affected funds exceeded $172 million. However, this figure was reduced by $45 million after some of the stolen assets were recovered.
The attack on the Balancer DeFi protocol ranked as the most significant exploit in November, representing one of the largest DeFi security breaches of 2025. The platform suffered a loss of over $116 million due to a complex cross-chain exploit that impacted multiple blockchains.
Approximately $135 million was lost in DeFi incidents, followed by $29.8 million drained in exchange hacks, according to CertiK data.
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