Yala Responds to YU Unpegging: ETH Price Drop Leads to Decrease in Recovery Value, Promises Clear Plan by December 15th

In response to rumors, Yala officials issued a statement regarding the unpegging of their stablecoin YU and liquidity crisis.

1. On September 14, 2025, Yala suffered a hack, losing $7.64 million USDC (equivalent to approximately 1636 ETH at the time). Although this caused YU to temporarily unpeg, the core protocol had no vulnerabilities. The team injected $5.5 million to stabilize the situation, and YU was re-pegged, with the protocol returning to normal operation.

2. On October 29, 2025, Bangkok law enforcement arrested the hacker, and most of the affected funds have been recovered. However, due to some funds being converted to ETH before recovery, the actual recovery value has decreased due to subsequent price drops and funds consumed by the attacker.

3. Recent retail investor withdrawals from the DeFi market have triggered further panic, putting additional pressure on the already illiquid market. Euler has also been affected, with some positions and liquidity used to stabilize YU currently restricted.

4. Yala is not integrated with Kamino lending products, and the following wallet does not belong to the Yala team or related members: AyCJS5t4kwRauXShpNygmUqhA2xzwjjVvafNTknNV41X.

5. The team is assessing the amount of funding needed to stabilize the market and is working with law enforcement and funding partners to secure financing. Given the current liquidity crunch across multiple protocols and assets, this process will take time. The team promises to announce a clear plan by December 15, 2025, including the path to fund recovery and future operational measures.

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