twt

By Crypto Market Desk | December 28, 2025

Executive Summary

The Incident: A supply-chain attack on the Trust Wallet Chrome Extension (v2.68) led to the theft of ~$7 million in user funds.

The Cause: Malicious code injected into the extension captured seed phrases during wallet imports.

The Resolution: Parent company Binance and Trust Wallet have pledged 100% reimbursement for all verified victims.

Market Reaction: TWT token plummeted to $0.76 before staging a relief rally to $0.86 upon the compensation announcement.

The "Christmas Day" Exploit: What Happened?

The crypto community faced a sobering wake-up call over the holidays when reports surfaced of funds vanishing from Trust Wallet accounts. The breach was isolated to the Chrome Browser Extension (version 2.68), released on December 24, 2025.

Unlike typical phishing attacks where users mistakenly sign malicious permissions, this was a supply-chain compromise. Attackers reportedly gained access to a developer's API key, allowing them to push a legitimate-looking but infected update to the Chrome Web Store.

Technical Deep Dive: Security firms, including SlowMist, identified that the attackers modified a legitimate analytics library (known as posthog-js). The injected code lay dormant until a user interacted with the "Manage Wallets" or "Import Seed Phrase" functions. Once triggered, it silently exfiltrated the user's seed phrase to an external command-and-control server, allowing hackers to drain wallets of ETH, BTC, SOL, and other assets within minutes.

Status: The vulnerability was patched in version 2.69.

Scope: Mobile app users were not affected.

Restoring Faith: The Reimbursement Pledge

In a move that prevented a wider market panic, Trust Wallet CEO Eowyn Chen and former Binance CEO Changpeng Zhao (CZ) acted swiftly. By December 27, the team confirmed that the $7 million loss would be fully covered by the company.

"We have confirmed that approximately $7M has been impacted and we will ensure all affected users are refunded," the company stated. A dedicated claims process has been opened via official support channels, with over 2,630 claims currently under review.

Market Impact Analysis: TWT Token

The native token, Trust Wallet Token (TWT), served as a real-time fear gauge during the crisis.

1. Price Action: Upon news of the hack, TWT suffered a sharp sell-off, crashing to a support floor of $0.76. However, the reimbursement promise acted as a "circuit breaker," fueling a V-shaped recovery back to $0.86.

2. Smart Money & Sentiment: Despite the price recovery, "Smart Money" remains cautious.

Whale Positioning: Institutional sentiment is heavily bearish. Data shows a staggering Long/Short ratio of 0.02, with 241 short positions against only 33 longs.

The "Fear" Factor: The Market Fear & Greed Index sits at 29 (Fear). While the immediate crisis is resolved, the breach has rattled confidence in browser-based wallets.

3. Technical Outlook:

Support: $0.78 is the critical line in the sand. If this holds, the recovery remains intact.

Resistance: Bulls must reclaim $0.87 to open the path toward $0.99.

Indicators: The MACD has flashed a bullish crossover on the 4-hour chart, suggesting short-term momentum, but the RSI remains neutral (62), indicating the market is waiting for the dust to settle.

The Verdict

While the technical breach was severe, the rapid financial response from Binance has likely saved TWT from a deeper capitulation. However, the overwhelmingly bearish whale sentiment suggests that large players expect the reputational damage to linger longer than the price action implies.

Advisory: Users should verify they are running extension version 2.69 or higher. If you used version 2.68, it is strongly recommended to create a new wallet and transfer funds immediately, as your seed phrase may be compromised.
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