UXLINK Heist: $40M Crypto Exploit Explodes Questions of Staged Chaos

The UXLINK Heist: A $40 Million Crypto Coup, a Phishing Twist, and Questions of Staged Chaos

On September 22, 2025, the Web3 social platform UXLINK was the latest victim in an ongoing wave of cryptocurrency exploits, losing approximately $40 million in assets through a complex assault that led to a collapse of about 70% in its token's value. The incident, thoroughly examined by blockchain forensics firms like AMLBot, underscores the precarious nature of nascent digital asset ecosystems and poses uneasy questions about the possibility of staged events to obscure illicit financial flows.

The breach stemmed from a major flaw involving a delegateCall function within UXLINK's multi-signature wallet smart contract on both Ethereum and Arbitrum networks. This flaw allowed the attacker to take over admin control, thereby stripping the legitimate owners' rights and placing their own address as the main authority.

Anatomy of an Exploit: From Admin Takeover to Market Crash

Once in control, the perpetrator executed a rapid, multi-pronged financial extraction:

• Direct Asset Extraction: Approximately $4 million in USDT, $500,000 in USDC, 3.7 WBTC, and 25 ETH were taken straight from UXLINK reserves.
• Token Inflation: The attacker initially captured approximately 490 million existing UXLINK tokens from the project's treasury. Subsequently, they used their newly acquired minting power to mint another 1 to 2 billion UXLINK tokens. This action roughly doubled the total circulating supply from around 995 million to nearly 2 billion tokens within minutes, creating a massive inflationary shock.
• Multi-Chain Laundering: The pilfered and freshly minted assets were quickly swapped across at least six different wallets. The main conversion approach involved exchanging sizable chunks for ETH, eventually yielding approximately 6,732 ETH (valued at roughly $28.1 million at the time) through various decentralized and centralized exchanges. The appropriated stablecoins on Ethereum were converted to DAI, while funds on Arbitrum were bridged to the Ethereum Mainnet, consolidating the ill-gotten gains.

The market reaction was swift and sharp. A flood of sells of UXLINK tokens, with an estimated $800,000 liquidated within hours, triggered a steep price decline. From approximately $0.30, the UXLINK token fell more than 70% to below $0.10, seeing an intraday plunge of over 90% at its lowest point (from $0.33 to $0.033) before a marginal recovery. The broader crypto market also saw spillover effects, as ETH came under selling pressure while the attacker converted and cashed out large sums.

UXLINK, which reportedly claimed over 54 million registered users globally by mid-2025, came under immediate scrutiny. Major crypto exchanges, including Upbit, responded by suspending UXLINK token deposits and withdrawals, freezing an estimated $5-7 million linked to the suspicious addresses within 24 hours. UXLINK's team admitted the breach about six hours after the exploit, confirming the unauthorized minting and reserve depletion.

The "Hacker Got Phished" Narrative and Underlying Doubts

In an odd twist, just one day after the initial UXLINK exploit, reports surfaced that the main perpetrator had been duped by a phishing attack. According to security researchers, the attacker "unwittingly approved a malicious smart contract," resulting in the loss of approximately 542 million UXLINK tokens, valued at around $48 million, to the notorious Inferno Drainer phishing group. This narrative, broadly spread and sparking discussions of "karma" within the crypto community, implied the thief had been robbed by another thief.

However, forensic analysis by AMLBot's investigation team offers an alternative, more cynical interpretation. "It cannot be ruled out that the supposed 'hack of the hacker' was not an accident at all, but a carefully staged maneuver," an AMLBot spokesperson stated, suggesting it "may have been a move to make the situation appear even more chaotic and thereby simplify the laundering process." The team points to several factors bolstering this hypothesis:

• False-Flag Tactics: These are well-established in cyber operations, designed to confuse investigators and buy time.
• Convenient Excuse: The "I was phished" defense has turned almost cliché in crypto crime, particularly with the proliferation of "Drainer-as-a-Service" schemes that obscure individual actors.
• Triage Overload: Such secondary incidents scatter investigative resources for law enforcement and exchanges, slowing down the overall response.
• Historical Precedent: The crypto space has seen cases where projects and insiders re-frame "rug pulls" as "hacks" to evade accountability, a tactic that twists narratives for strategic advantage.

Whether the secondary phishing incident was genuine or a deliberate misdirection, the initial attacker, according to conservative estimates, still retains between $20-30 million of the original loot, largely converted to ETH, across various un-offloaded addresses. The lost UXLINK tokens-those supposedly siphoned by Inferno Drainer-were freshly minted and effectively "worthless" to the attacker in terms of their original investment, bolstering the argument of a strategic maneuver rather than a genuine setback.

Rebuilding and Regulatory Scrutiny

Following the crisis, UXLINK developers initiated a new contract audit and are finalizing a token swap implementation. Users have been advised against trading the compromised token until the migration is complete. The core vulnerabilities identified comprised the lack of a hardcoded supply cap on token minting and inadequate access control protections, which rendered the delegateCall exploit catastrophic. UXLINK plans to implement multi-layer key management, stricter admin privileges, and potentially community oversight for future contract changes. Exchanges like Upbit and Bithumb have flagged UXLINK as a "cautionary asset."

The UXLINK incident highlights the persistent challenges in securing web3 infrastructure, especially as the regulatory landscape struggles to keep pace. As of 2025, over 75 % of jurisdictions remain only partially compliant with the Financial Action Task Force's (FATF) anti-money laundering (AML) standards for virtual assets. While the EU pushes forward regulatory harmonization with MiCA and AMLR, and the U.S. employs multi-agency oversight, the ease with which large sums can be laundered across chains and the potential for sophisticated misdirection tactics continue to pose significant hurdles for recovery and justice.

Token Report (@Token_Reports) continues to monitor these developments.