Executive Summary

UXLINK, a Web3 social platform, suffered an $11.3 million security breach on its multi-signature wallet, leading to the unauthorized minting of billions of tokens and a 77% price collapse of its native token. The incident, first detected by Cyvers Alerts on September 22, 2025, involved an exploit of a delegateCall vulnerability, allowing the attacker to gain administrative control and manipulate token supply. UXLINK has responded by coordinating with exchanges to freeze funds, engaging law enforcement, and planning a token swap to restore ecosystem integrity.

The Event in Detail

On September 22, 2025, blockchain security firm Cyvers Alerts identified suspicious activity within UXLINK's smart contracts, leading to the official confirmation by UXLINK on September 23, 2025, of a security breach involving its multi-signature wallet. The exploit leveraged a vulnerability in the wallet's delegateCall implementation, which granted the attacker administrator-level access. This allowed the perpetrator to bypass access controls, reconfigure wallet permissions, and manipulate token supply mechanisms.

The attacker drained approximately $11.3 million in assets, including $4.5 million in stablecoins such as USDT, WBTC, and ETH. On-chain analysis by Lookonchain indicated that the hacker transferred 542 million UXLINK tokens to phishing addresses and sold 490 million tokens on decentralized exchanges (DEXs). Furthermore, the attacker engaged in unauthorized minting, creating between 1 and 2 billion new UXLINK tokens on the Arbitrum network, with later reports suggesting minting continued to approximately 10 trillion units. These illicitly minted and drained tokens were subsequently liquidated, with proceeds bridged to Ethereum and swapped for ETH, netting at least 6,732 ETH, valued at approximately $28.1 million. The market reaction was severe, with the UXLINK token price falling from $0.30 to $0.09454 within hours, representing a 77% decline and erasing an estimated $70 million from its market capitalization.

Financial Mechanics and Response

The security breach's core financial mechanism involved the unauthorized minting and subsequent liquidation of UXLINK tokens. By exploiting the delegateCall vulnerability, the attacker effectively created an inflationary event, diluting the existing token supply and enabling large-scale sell-offs. The direct asset drain included $4 million in USDT, an additional $500,000 in USDT, 3.7 WBTC (valued at approximately $418,590), and 25 ETH (valued at approximately $105,326).

In response to the attack, UXLINK has taken several coordinated actions. The platform immediately notified its community not to trade $UXLINK on DEXs and engaged major centralized exchanges (CEXs) to halt trading and freeze suspicious deposits. Early interventions by platforms like Upbit successfully froze between $5 million and $7 million in stolen funds. However, analysts estimate that between $20 million and $30 million in stolen assets remain under the hacker's control. UXLINK has reported the incident to law enforcement agencies and is collaborating with blockchain analytics firm Blockscope and security firm PeckShield to track the flow of funds on the Arbitrum and Ethereum networks and assist with investigations. To mitigate the impact of the unauthorized minting and restore the token's economic model, UXLINK announced plans for a token swap, emphasizing that user wallets were not directly affected and most stolen funds have been frozen. The project has also pledged to compensate victims through a community-governed process.

Market Implications

This incident highlights critical vulnerabilities within the DeFi ecosystem, particularly concerning the reliability of multi-signature wallets, which are designed to enhance security but proved susceptible when access rights were misconfigured. The UXLINK hack underscores the necessity for more robust smart contract audits and continuous security assessments for Web3 platforms employing complex governance models. The event has led to heightened scrutiny across the industry, reinforcing concerns about single points of failure even in seemingly secure multi-signature setups.

The broader market implications include a potential erosion of investor trust in Web3 social platforms and projects utilizing multi-signature wallet solutions. Such breaches can deter institutional and retail investors, leading to increased demand for transparent security protocols and comprehensive risk assessments. The incident serves as a cautionary tale for other projects, emphasizing the financial and reputational risks associated with unaddressed security flaws and the potential for rapid market capitalization loss.

Expert Commentary

Analysts have noted that the UXLINK breach reignites debates surrounding the inherent security of multi-signature wallets within DeFi. While intended to mitigate risks by requiring multiple approvals, the exploit demonstrates that vulnerabilities in underlying delegateCall functions or misconfigured access controls can undermine these security measures. Industry experts emphasize that such incidents directly erode investor trust, positioning UXLINK's situation as a stark example for projects built on intricate governance structures. The need for continuous, rigorous auditing and transparent incident response protocols is a recurring theme in expert discussions post-breach.

Broader Context

The UXLINK hack aligns with a concerning trend of security exploits in the Web3 space, particularly targeting DeFi protocols and multi-signature wallets. This incident follows numerous other high-profile breaches, reinforcing the ongoing challenges in securing decentralized applications and user assets. The rapid response from UXLINK, including coordination with exchanges and law enforcement, reflects an industry-wide push for prompt incident management. However, the scale of unauthorized minting and asset drainage underscores the persistent threat landscape, necessitating a re-evaluation of current security best practices and the development of more resilient infrastructure to protect nascent Web3 ecosystems.