The DeFi project Unleash Protocol has suffered a loss of approximately $3.9 million due to a hacking incident, according to analysts at PeckShield.
#PeckShieldAlert @UnleashProtocol on @StoryProtocol reported an unauthorized drain, resulting in a ~$3.9M loss.
The exploiter then bridged the stolen funds to #Ethereum and deposited them (1,337.1 $ETH) into Tornado Cash. https://t.co/KHVBm0DWBr pic.twitter.com/Lc8qMzkJGV
— PeckShieldAlert (@PeckShieldAlert) December 30, 2025
The hacker extracted assets, converted them, and transferred them to Ethereum. Later, 1337.1 ETH was sent to the cryptocurrency mixer Tornado Cash.
The Unleash Protocol team confirmed the breach. Among the stolen tokens were WIP, USDC, WETH, stIP, and vIP.
Unleash Protocol Incident Notice
Earlier today, we detected unauthorized activity involving Unleash Protocol smart contracts, which led to the withdrawal and transfer of user funds.
Our initial investigation indicates that an externally owned address gained administrative…
— Unleash Protocol (꧁IP OS꧂) (@UnleashProtocol) December 30, 2025
Preliminary information suggests the perpetrator gained control through the multisig wallet of the administrator. This allowed for unauthorized smart contract updates and the withdrawal of user funds.
Developers have temporarily suspended all services of the Unleash Protocol. The team is working with cybersecurity experts to investigate the incident further.
Project representatives noted that the infrastructure of the Story Protocol network, on which the application operates, was not affected.
Unleash Protocol is a decentralized platform for managing intellectual property. The project offers tools for registering, licensing, and trading tokenized content rights.
On December 27, the FLOW token dropped 40% following a $3.9 million hack.