Trust Wallet to Reimburse $7M After Christmas Browser-Extension Hack

Published: 2025-12-27 12:38:11 |

Binance co-founder Changpeng Zhao (CZ) said Trust Wallet will reimburse roughly $7 million after a malicious browser-extension update (v2.68.0) stole funds on Christmas Day. Security firm SlowMist and independent researchers reported the compromised extension contained a backdoor that exfiltrated sensitive user data — including seed phrases — to an attacker-controlled endpoint (api.metrics-trustwallet[.]com). Investigators reconstructed a timeline showing preparation beginning around Dec. 8, the backdoor injected on Dec. 22, and fund transfers commencing Dec. 25. Trust Wallet released a patched desktop-extension (v2.69.0) and urged users to upgrade; earlier reports referenced v2.89.0 in some advisories. Industry observers and on-chain analysts note the incident likely required insider knowledge or familiarity with Trust Wallet’s code or release process because attackers were able to publish a malicious update. Chainalysis data cited in coverage places 2025 crypto thefts well into the billions year-to-date and shows an increase in individual wallet-targeted attacks. CZ said user funds are safe (SAFU) while the team continues investigating how the malicious version was submitted. Key takeaways for traders: wallet-extension vulnerabilities remain an active attack vector; short-term sell pressure could hit related on‑chain activity or asset flows if confidence in desktop wallet security declines; affected users will be reimbursed, which may limit longer-term market disruption.

Bearish

Short-term market impact is likely bearish for assets directly affected by wallet-security sentiment. The hack targeted Trust Wallet’s desktop extension, stole roughly $7M and exposed seed phrases — a high‑severity breach that undermines confidence in non-custodial desktop wallets. Traders may see short-term sell pressure as users withdraw funds from at-risk platforms, reduce on‑chain activity, or move assets into custodial or hardware wallets. Reimbursement by Trust Wallet and the patch release reduce long-term systemic risk and should limit prolonged price damage; once investigations clarify whether an insider was involved and users upgrade, confidence may recover. Overall, expect immediate negative sentiment and increased volatility followed by stabilization if remediation and reimbursements proceed smoothly.