Trust Wallet Extension Vulnerability Causes $6M Loss in Extreme Fear Market

• Trust Wallet browser extension version 2.68 vulnerability results in $6 million in losses
• Mobile users and other extension versions unaffected according to company statement
• Incident occurs amid Extreme Fear market sentiment (Score: 20/100)
• Bitcoin trading at $87,127, down 0.56% in 24-hour period

VADODARA, December 26, 2025 — A security vulnerability in Trust Wallet's browser extension has resulted in $6 million in losses, according to blockchain investigator ZachXBT. This latest crypto news emerges as the cryptocurrency market experiences extreme fear sentiment, with Bitcoin testing key support levels. Market structure suggests this incident could exacerbate existing liquidity concerns.

Market Context & Background

Security vulnerabilities in self-custody wallets represent systemic risk vectors. The Trust Wallet incident follows historical patterns where technical flaws during periods of market stress amplify sell pressure. This mirrors the 2021 Ledger data breach that triggered significant outflows from decentralized finance protocols. Current market conditions show Extreme Fear sentiment at 20/100, creating an environment where security concerns can trigger disproportionate reactions. On-chain data indicates reduced network activity across major chains, suggesting retail investors are withdrawing from active trading.

Related developments in this market environment include the Fear & Greed Index plunging to 20 and Bitcoin testing $87K support amid extreme fear sentiment.

What Happened?

Version 2.68 of the Trust Wallet browser extension contained a security vulnerability that allowed unauthorized access to user funds. Blockchain expert ZachXBT identified the exploit and quantified losses at approximately $6 million. Trust Wallet confirmed the incident in a statement, specifying that only users of the affected browser extension version were impacted. Mobile wallet users and users of other extension versions remain unaffected. The company stated its team is actively working to resolve the issue and will provide updates as they become available. No specific technical details about the vulnerability were disclosed, though market analysts speculate it may involve private key exposure or transaction signing flaws.

Technical Analysis & Price Action

Bitcoin currently trades at $87,127, representing a 0.56% decline over the past 24 hours. The 50-day moving average sits at $89,450, creating immediate resistance. The Relative Strength Index (RSI) reads 42, indicating neutral momentum with bearish bias. Volume profile shows reduced trading activity, typical of extreme fear environments. Fibonacci retracement levels from the recent high of $92,000 to the low of $85,000 place immediate support at $86,500 (61.8% level). Market structure suggests this security incident could trigger a liquidity grab below this level.

Bullish invalidation level: $85,000. A break below this level would confirm bearish continuation.

Bearish invalidation level: $89,500. A sustained move above the 50-day MA would negate current bearish structure.

By The Numbers

Why It Matters

For institutional investors, this incident highlights ongoing security challenges in self-custody solutions. Despite advancements in multi-signature technology and hardware wallet integration, browser extensions remain vulnerable attack vectors. The $6 million loss represents a relatively small amount in institutional terms but signals potential systemic issues. For retail users, the incident reinforces the importance of version management and security best practices. Market analysts note that security breaches during extreme fear periods can accelerate capital outflows, creating negative feedback loops in price discovery mechanisms.

Community Sentiment

Industry observers express concern about the timing of this vulnerability. "Security incidents during market stress test the resilience of self-custody adoption," noted one blockchain security researcher on X. Another analyst commented, "The combination of extreme fear sentiment and a high-profile wallet vulnerability creates perfect conditions for panic selling." Trust Wallet's communication strategy has received mixed reviews, with some users praising the quick identification of affected versions while others criticize the lack of technical transparency.

Price Prediction / Future Outlook

Bullish Case: If Trust Wallet resolves the vulnerability promptly and provides transparent remediation, market confidence could stabilize. Bitcoin holding above the $86,500 Fibonacci support would indicate resilience. A break above the 50-day MA at $89,500 could trigger short covering and push prices toward $91,000. Historical patterns show that well-contained security incidents during fear periods often create buying opportunities once technical resolution is confirmed.

Bearish Case: If additional vulnerabilities are discovered or remediation is delayed, the incident could trigger broader concerns about self-custody security. Bitcoin breaking below $85,000 would confirm bearish momentum, potentially targeting the $82,000 support level. The extreme fear environment (20/100) suggests limited buying appetite, making downward moves more probable. A sustained break below $82,000 would invalidate the current bullish market structure established since October.

FAQs

1. Which Trust Wallet versions are affected by the vulnerability? Only version 2.68 of the Trust Wallet browser extension is affected. Mobile users and users of other extension versions are not impacted.

2. How much was lost in the Trust Wallet vulnerability? Blockchain investigator ZachXBT reported approximately $6 million in total losses from the exploit.

3. Is my Trust Wallet mobile app safe? According to Trust Wallet's statement, mobile users are not affected by this specific vulnerability.

4. What should affected users do? Users of version 2.68 of the browser extension should immediately update to the latest version and monitor their wallets for unauthorized transactions.

5. How does this affect Bitcoin price? Security incidents during periods of extreme market fear can exacerbate selling pressure. Bitcoin is currently testing support at $87,000 with the Fear & Greed Index at 20/100.

Data source: Read Original Report

Source Note: Market data and factual reporting in this article are sourced from original reports. Commentary and analysis provided by CoinMarketBuzz.