Yuga Labs Rescues 68 High-Value NFTs From Flooring Protocol Exploit

Yuga Labs has completed a whitehat rescue operation after an exploit was discovered in Flooring Protocol, moving 68 high-value NFTs into company custody before the assets could be taken.

The rescued NFTs include 29 Bored Ape Yacht Club NFTs, four Mutant Ape Yacht Club NFTs, one Bored Ape Kennel Club NFT, two CryptoPunks, one Azuki, two Elementals, 26 Captains, one Moonbird and two Doodles.

Yuga Labs CEO Michael Figge said the assets are now safely held by the company while it works with Flooring Protocol developers on the return process. The recovery covered several major NFT collections, with BAYC and CryptoPunks among the most recognizable assets exposed through the protocol risk.

The move appears to have focused on containment before a wider loss could occur. For NFT markets, that matters because a forced theft or rushed attacker sale of dozens of blue-chip assets could have added pressure to already thin collection liquidity.

GrailsOTC Fronted Funds For The Rescue

Figge said Yuga Labs instructed GrailsOTC, its trading desk, to front the funds and NFTs needed to complete the rescue. That allowed the team to act quickly, remove the exposed assets from the risk path and hold them while the protocol-side fix is prepared.

The recovery was carried out by 0xQuit, Yuga Labs’ vice president of blockchain, while CoffeeDev identified that the same vulnerability could create a broader risk for other Flooring Protocol-linked collections, including BAYC and CryptoPunks.

The use of a whitehat rescue gives the incident a different structure from a completed theft. The NFTs were not described as stolen by an attacker, dumped into the market or moved through laundering routes. They were extracted into protective custody after the vulnerability was identified.

Flooring Protocol Fix Becomes The Next Step

The next stage depends on Flooring Protocol’s remediation plan and the technical path chosen to restore safe access for affected users. That could include contract-level changes, a relaunch path or other steps designed to prevent the same exploit route from being used again.

The incident adds another security warning for NFT holders who use financialized NFT products. When NFTs are deposited into protocols, wrapped, fractionalized, used for liquidity or routed through smart contracts, their safety depends on protocol permissions, contract logic and recovery processes as much as the collection itself.

That pressure is building across crypto infrastructure as AI-assisted security research and automated exploit discovery make smart-contract risk harder for protocols to ignore. NFT markets are also adjusting to a tougher operating environment, with Binance recently giving users a fixed deadline for NFT service withdrawals and OpenSea pushing beyond collectibles with a Hyperliquid-powered perps tease.

For now, the immediate damage appears to have been contained. Yuga Labs holds the rescued NFTs, GrailsOTC fronted the resources needed to complete the extraction, and Flooring Protocol developers must finalize the fix before the assets can be returned to their owners.

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