UXLINK Hack Sends $43M Crypto Loss, Token Crashes 65%

UXLINK Phishing Attack Results in $11 Million Loss: Investigation Underway

The Web3 social network UXLINK has suffered a major security breach, resulting in a reported loss of approximately $11 million in cryptocurrency assets. The attack, identified on September 22, 2025, involved the unauthorized access of the platform’s multi-signature wallet, allowing attackers to transfer significant amounts of tokens and create additional coins. As the investigation continues, both investors and industry observers are closely monitoring the situation to assess the impact on the platform and the broader market.

Overview of the Attack

UXLINK’s team confirmed that the exploit stemmed from a vulnerability in the platform’s multi-signature wallet, which allowed attackers to gain administrator-level privileges. By exploiting a flaw in the "delegateCall" function, the malicious actor was able to transfer 542 million UXLINK tokens to phishing addresses and gain control over an additional 490 million tokens. Reports indicate that the attacker also illicitly minted 2 billion new tokens, increasing the total circulating supply.

Scam Sniffer reported on X that the malicious address executed an increaseAllowance approval to a phishing contract, effectively moving 542 million tokens, valued at roughly $43 million, to multiple addresses. Subsequently, the hacker dumped a large portion of the illicitly obtained tokens on both centralized (CEX) and decentralized exchanges (DEX), netting approximately 6,732 ETH, equivalent to around $28.1 million.

Assets Affected

The breach affected multiple cryptocurrencies within the UXLINK ecosystem, including stablecoins USDT and USDC, as well as prominent assets like Ethereum (ETH) and Wrapped Bitcoin (WBTC). While reports suggest that the total calculated loss amounts to $11.3 million, the full extent of financial damage is still being assessed as authorities collaborate with exchanges to freeze affected funds.

Security firms such as PeckShield have been enlisted to investigate the breach and assist in asset recovery. The UXLINK team emphasized that user wallets were not directly compromised, ensuring that individual investors did not lose their holdings directly due to the exploit.

Market Reaction

In response to the attack, the price of UXLINK tokens experienced a dramatic decline, plummeting 65% to an all-time low of $0.1097. In a 24-hour period, the token’s value dropped by 66%, sparking concern among traders and investors about the platform’s stability and the potential for further losses.

Despite the significant drop, trading activity surged, with a 24-hour trading volume increase of 1,360%, reaching $478 million. Analysts suggest that this heightened trading activity reflects both panic selling and opportunistic trading as market participants react to the exploit.

Recovery Measures and Next Steps

UXLINK’s development team has implemented immediate measures to mitigate the damage. Funds on exchanges have been frozen, and law enforcement agencies are actively involved in tracing and recovering the stolen assets. The company has reassured users that their personal wallets were not compromised and that no direct losses occurred for individual token holders.

To address the illicit minting of 2 billion tokens, UXLINK has announced plans for a prompt token swap. This measure aims to realign the token supply with the project’s whitepaper guidelines and protect the interests of legitimate investors. The development team will communicate detailed instructions and next steps through official channels to ensure transparency and user compliance.

Industry Implications

The UXLINK phishing attack underscores the ongoing challenges faced by Web3 projects in securing multi-signature wallets and smart contract-based assets. Security vulnerabilities in blockchain applications can lead to substantial financial losses and erode user confidence in decentralized networks.

Experts highlight that while decentralized finance (DeFi) and Web3 platforms offer significant benefits, including transparency and control over digital assets, they also carry heightened risks. This incident reinforces the need for rigorous security audits, real-time monitoring, and robust incident response strategies.

Lessons for the Web3 Ecosystem

The UXLINK exploit demonstrates several key lessons for both developers and investors in the Web3 space:

1. Multi-Signature Wallet Security: Even wallets with multiple administrative approvals are not immune to vulnerabilities if smart contract functions are improperly implemented.

2. Risk Management: Investors should diversify holdings and avoid keeping large amounts of digital assets on single platforms or wallets.

3. Transparency and Communication: Swift and clear communication from projects during security incidents is critical to maintaining user trust.

4. Regulatory Oversight: Collaboration with security firms and law enforcement agencies highlights the importance of establishing frameworks for monitoring and mitigating crypto-related cybercrime.

Moving Forward

As investigations continue, UXLINK is focused on restoring platform security and maintaining transparency with its user base. The company’s proactive measures, including freezing exchange funds and planning a token swap, are expected to stabilize the ecosystem and reassure investors.

Meanwhile, the broader crypto community is paying close attention, using this incident as a case study for the importance of cybersecurity in blockchain platforms. Analysts predict that while the token’s price may face short-term volatility, long-term recovery is possible if the platform successfully addresses vulnerabilities and regains investor confidence.

Conclusion

The UXLINK phishing attack, resulting in approximately $11 million in losses, highlights the persistent security challenges faced by Web3 platforms. By exploiting a flaw in the multi-signature wallet, attackers were able to move large quantities of tokens, mint additional coins, and impact the market significantly. Immediate measures, including fund freezes and a planned token swap, are aimed at mitigating the damage and protecting investors.

This incident serves as a stark reminder for developers, investors, and regulators about the critical importance of security, transparency, and proactive risk management in the rapidly evolving Web3 ecosystem. As UXLINK navigates recovery, the outcomes will provide valuable insights for the broader cryptocurrency and decentralized finance communities.

Writer @Erlin

Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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