**Yala Blockchain Faces Liquidity Crisis and Suspicious Activity in YU Stablecoin**
The Yala blockchain platform announced on November 16 that it is addressing liquidity concerns and suspicious activities involving its YU stablecoin, with an investigation currently underway. This issue highlights vulnerabilities within DeFi protocols, raising growing concerns about security and liquidity in the crypto markets—especially following a substantial depegging of the YU stablecoin.
### Yala’s Liquidity Shock: Borrowing Patterns Under Scrutiny
Yala reported significant liquidity disruption after YAM Protocol issued warnings about suspicious borrowing behavior within the Yala market on Euler. Notably, all available USDC was borrowed despite high-interest rates and subsequent non-repayment. In response, the Euler team set the lending limit on Yala’s market to zero, effectively impeding withdrawals.
> “We have observed suspicious on-chain borrowing activity that led to 100% fund utilization in Yala’s USDC pool on Euler,” stated the Yala team.
### Market Data and Critical Challenges
Yala now faces critical challenges as a result of these events. For context, in May 2025, the stablecoin USDX faced a similar liquidity crisis due to problematic borrowing behaviors in its markets—drawing parallels to the current situation unfolding with Yala.
Recent data from CoinMarketCap shows that Yala’s stablecoin YU holds a market price of $0.96, marking a 4.28% decline over the past 24 hours. The market capitalization stands at $85,978,165, with a 24-hour trading volume surging by 115.90% to $909,202.74.
### Looking Ahead
These recent developments underscore the ongoing challenges DeFi projects face in maintaining liquidity and stability. Yala’s investigation remains active, as the platform works to restore trust and stabilize its markets.
https://bitcoinethereumnews.com/tech/yala-addresses-liquidity-crisis-amid-suspicious-activities/
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