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Venus Protocol Halts THE Market After $3.7 Million Price-Manipulation Exploit

The attacker used a donation exploit to bypass supply caps on the Compound-forked lender, leaving roughly $2.15 million in bad debt.

Overview

  • Venus froze six high‑risk markets and paused all THE borrowing and withdrawals as its investigation continues.
  • The exploiter sent THE directly to the vTHE contract to inflate collateral, then looped borrows as the TWAP oracle lagged.
  • On‑chain data indicates about 20 BTC, 6.67 million CAKE, 2,801 BNB, and 1.58 million USDC were borrowed before liquidations.
  • Investigators report the attacker’s wallet was funded with 7,400 ETH via Tornado Cash, and the on‑chain outcome may have yielded little or no profit.
  • Venus says it is tightening collateral controls and reviewing oracle design after audits had previously flagged the donation‑attack vector.