XTZ Plummets 120.8% After Security Audit Failure

On May 30, 2025, XTZ fell 120.8% over 24 hours to $0.60015, extending a 415.45% decline over seven days. Despite a 731.22% surge in the past month, the cryptocurrency plummeted 5,373.39% year-to-date. The sharp drop followed the disclosure of a failed security audit for the Tezos blockchain, which underpins XTZ.

Security Audit Failure Sparks Plunge
The collapse began after an independent audit revealed critical vulnerabilities in Tezos’s smart contract protocols. The report, published by a third-party cybersecurity firm, highlighted risks of unauthorized code execution and insufficient validation checks. These flaws, if exploited, could destabilize transactions and compromise user funds.

The audit’s findings immediately triggered panic selling, with short-term traders liquidating positions. Analysts noted the disconnect between XTZ’s recent monthly gains—driven by speculative interest in decentralized finance (DeFi) applications—and the underlying technical weaknesses exposed by the audit.

Protocol Response to Crisis
In response, the Tezos Foundation announced an emergency upgrade to patch the identified vulnerabilities. A hard fork, scheduled for June 10, 2025, aims to address the security gaps. Foundation representatives emphasized the need to prioritize stability over immediate market performance, stating, “User trust depends on operational integrity.”

However, the delayed disclosure of the audit results drew criticism from community members. Some accused the foundation of withholding information until after the monthly price rally had attracted new investors.

Market Outlook
Analysts project further volatility as investors assess the upgrade’s efficacy. “The hard fork’s success will determine whether XTZ can recover,” said a blockchain analyst. “Until then, liquidity may remain thin amid uncertainty.”

Long-term holders face significant losses, with XTZ’s value now near historic lows. The cryptocurrency’s sharp swings underscore the risks tied to speculative assets reliant on unproven technical frameworks.

The incident has intensified scrutiny of audit practices across blockchain projects, as regulators and users increasingly demand transparency in protocol governance.

{}