Identity theft TLDR:
- Venus Protocol lost $3.7M in a flash loan attack the utilize of THE token as collateral.
- THE token designate surged to $0.563 earlier than collapsing to $0.22 throughout liquidation events.
- Six Venus markets in conjunction with BCH and LTC were hasty frozen after the exploit.
- Borrowing and withdrawals for THE token paused while investigation continues.
Venus Protocol flash loan attack on BNB Chain caused over $3.7 million in losses. THE token modified into exploited to govern collateral, enabling the attacker to borrow excessive-payment assets earlier than the market collapsed.
Identity theft Exploit Mechanics and Borrowing Approach
The Venus Protocol flash loan attack targeted the Core Pool on BNB Chain, the utilize of THE token as collateral. The attacker amassed approximately 84% of THE present over 9 months to prepare for the exploit.
Moderately than following the usual deposit direction of, the attacker straight away transferred tokens to the vTHE contract. This allowed collateral positions a long way above the provision cap, reaching fifty three.2 million THE tokens, almost 3.7 cases the protocol’s restrict.
On-chain data presentations Venus Protocol modified into suspected to endure a flash-loan attack. The attacker address 0x1a35…6231 got about 20 BTC, 1.5 million CAKE, and 200 BNB, totaling over $3.7 million, after the utilize of a mighty quantity of THE as collateral on Venus to borrow CAKE, BTCB, and… pic.twitter.com/qnyISI5pp5
— Wu Blockchain (@WuBlockchain) March 15, 2026
The usage of this inflated collateral, the attacker borrowed about 20 BTC, 1.5 million CAKE, 200 BNB, and 1.58 million USDC.
The strategy repeated in a loop: deposit THE, borrow assets, aquire more THE, and never sleep for the TWAP oracle to regulate, inflating collateral payment.
The manipulation caused THE’s designate to spike from $0.263 to $0.563 earlier than falling to $0.22 as liquidations came about. This pattern mirrored prior DeFi exploits bright low-liquidity tokens and automated liquidations.
Identity theft Venus Protocol Response and Market Measures
Following the attack, Venus iced up six excessive-chance markets, in conjunction with BCH, LTC, UNI, AAVE, FIL, and TWT. Borrowing and withdrawals of THE tokens were hasty paused while all other markets remained operational.
Investigations counsel the attacker will own susceptible Tornado Money to fund operations. Venus has since tightened collateral principles and plans to be taught oracle mechanisms to prevent an identical attacks in the prolonged streak.
The estimated nasty debt ranges from $1.7 million to $2.15 million, basically from the CAKE market. The protocol confirmed the queer activity modified into confined to the THE and CAKE markets and did not affect the broader ecosystem.
Security analysts continue monitoring Venus to assess the handling of low-liquidity tokens. Investors are suggested to declare warning when lending or borrowing such tokens, making paddle sturdy protocols are in site to sever advantage chance.
