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Venus Protocol User Loses $13M in Phishing; Funds Recovered

Venus Protocol User Loses $13.5M in Phishing Attack as DeFi Community Rallies to Recover Stolen Funds

  • A Venus Protocol user lost $13.5 million in a phishing attack.
  • The protocol was temporarily paused to stop the Hacker from laundering the funds.
  • Stakeholders in Venus Protocol voted to liquidate the attacker and recover the stolen funds.
  • Losses from crypto hacks and exploits worldwide have exceeded $2 billion this year.
  • This incident highlights ongoing community-led efforts in DeFi to counter cyber thefts and restore stolen assets.

A hacker stole $13.5 million from a user on the Venus Protocol in a phishing attack on Tuesday. The protocol, which manages around $2.7 billion in investor deposits, immediately paused operations to contain the incident.

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According to protocol representatives, stakeholders held an emergency vote just hours after the theft and approved measures to liquidate the attacker’s position and return the stolen funds to the victim. The action plan passed unanimously, with the team stating that it would not impact other users.

The attacker accessed the victim’s account by tricking them into signing a harmful transaction, a social engineering method known as phishing. After gaining access, the funds were transferred to the attacker’s wallet. “Stolen funds will be recovered in a single transaction [and] this will not affect any other user positions on Venus,” the team said.

The protocol announced that once the hacker is liquidated, Venus will restore full service for users. For now, some functions are partially reopened, allowing users to manage their debts and avoid unintended liquidations. In a previous incident in March, Venus Protocol lost almost $1 million to a “donation attack,” where a hacker sent malicious tokens to lure victims into risky transactions.

DeFi platforms, including Venus Protocol, are responding to a rise in cyberattacks. Losses from hacks, phishing, and other exploits have now surpassed $2 billion in 2024, with the single largest event being the $1.4 billion theft from Bybit crypto exchange. Other projects, such as the Sui network and Tapioca DAO, have also taken similar steps to counter Hackers and return funds to their users.

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For more details about this year’s Hacking losses, visit DefiLlama’s hack tracker.

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