March 21, 2025 | Cryptonite
UAE Dubai’s booming crypto scene got a harsh reality check this week as Zoth Protocol, a decentralized restaking platform for real-world assets (RWAs), was hit by a devastating exploit. Hackers drained approximately $8.85 million in a meticulously executed attack, exposing vulnerabilities that could rattle the UAE’s growing DeFi ecosystem. Here’s what happened—and what it means for the region’s blockchain ambitions.
The Heist: How It Went Down
On March 19, 2025, an attacker compromised Zoth’s deployer wallet, gaining admin privileges to upgrade the “USD0PPSubVaultUpgradeable” contract to a malicious version. Within 30 minutes, they siphoned off $8.85M in USD0++ tokens, swapping $8.3M of it into DAI stablecoin and vanishing into the blockchain ether. By March 21, the news broke, and Zoth’s website flipped to maintenance mode as the team scrambled to respond. Blockchain security firm Cyvers Alerts flagged the breach, noting the attacker’s speed: the DAI swap happened “within minutes,” leaving little room for intervention. Estimates vary slightly—Crypto.news reports $8.4M, while community buzz on X aligns with the $8.85M figure—but the damage is undeniable.
UAE’s DeFi Dreams Tested
The UAE has positioned itself as a global crypto hub, with Dubai’s VARA regulations and state-backed moves like Emirates NBD’s crypto trading rollout earlier this month. Zoth, founded in 2023 by Pritam Dutta and Koushik Bhargav, had raised $4M last August to tokenize assets like U.S. Treasury Bills—a vision that resonated with the UAE’s RWA push. This exploit, however, underscores the risks lurking beneath the hype.
Zoth’s team has promised a full report post-investigation, working with partners to mitigate the fallout. But the ripple effects could hit harder here in the UAE, where investor confidence is key to sustaining crypto growth. Posts on X are already calling for tighter security audits—will this spark a regulatory rethink in Dubai? For now, the community waits. Losses this big don’t just hurt wallets; they dent trust. As the UAE doubles down on blockchain, Zoth’s breach is a stark reminder: innovation without ironclad security is a gamble we can’t afford to lose. Stay tuned for updates—and keep your keys close. For now, the community waits. Losses this big don’t just hurt wallets; they dent trust. As the UAE doubles down on blockchain,
Zoth’s breach is a stark reminder:
innovation without ironclad security is a gamble we can’t afford to lose. Stay tuned for updates—and keep your keys close. passed security instantly,” said Hakan Unal of Cyvers Alerts, pointing to a leaked admin key as the likely culprit. Experts suggest multisig upgrades and timelocks could’ve thwarted this, but for now, Zoth’s users are left reeling—a $8.85M lesson in DeFi’s fragility.