# Cross-Chain Exploit Causes Bitcoin-Backed Stablecoin to Depeg ▴ News

**Published:** 2025-09-15
**Categories:** News

---

The Yala protocol’s stablecoin, YU, suffered a catastrophic de-pegging event due to a cross-chain bridge exploit. An attacker leveraged a vulnerability to mint 120 million unauthorized tokens on the Polygon network, subsequently draining $7.7 million in liquidity by bridging and selling these assets across the Ethereum and Solana networks. This incident exposes a critical failure point in the system’s architecture, specifically within the interoperability layer responsible for inter-blockchain communication.

The core Bitcoin collateral, held in self-custodial vaults, remained secure; the failure occurred at the protocol’s periphery, in the mechanism designed to extend the asset’s utility across different ecosystems. The immediate consequence is a systemic liquidity crisis for the YU token and a severe degradation of market confidence in the protocol’s security framework.

The exploit demonstrates that even when a core asset vault remains unbreached, vulnerabilities in cross-chain bridge architecture can entirely compromise a stablecoin’s peg and operational integrity.

- 
**Unauthorized Minting** ▴ 120 million YU tokens were created without authorization.

- 
**Value Drained** ▴ $7.7 million USDC was extracted from the protocol.

- 
**Primary Vulnerability** ▴ A cross-chain bridge exploit allowed for the “infinite mint” attack.

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**Tags:** [Infinite Mint](https://options.greeks.live/area/infinite-mint/), [Protocol Vulnerability](https://options.greeks.live/area/protocol-vulnerability/), [Over-Collateralized](https://options.greeks.live/area/over-collateralized/), [Unauthorized Tokens](https://options.greeks.live/area/unauthorized-tokens/), [Self-Custody](https://options.greeks.live/area/self-custody/), [Smart Contract Architecture](https://options.greeks.live/area/smart-contract-architecture/)	

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---

**Original URL:** https://options.greeks.live/news/cross-chain-exploit-causes-bitcoin-backed-stablecoin-to-depeg/
