DeFi’s Latest Showdown: Stakeholders Outwit $13.5M Phishing Attack

Venus Protocol has resumed full operations after successfully recovering the $13.5 million in stolen funds from a phishing attack that initially paused the platform’s services. The incident, which unfolded on the Binance Smart Chain (BSC), saw an individual fall victim to a sophisticated scam where the attacker exploited a malicious transaction to drain the user’s assets, including stablecoins and tokenized assets such as vUSDT, vUSDC, and BTCB. Despite initial reports estimating the loss at $27 million, blockchain security firm PeckShield later corrected the figure to $13.5 million after accounting for the user’s debt position in the initial calculation [1].

Venus Protocol’s official response on social media confirmed the incident was not due to a flaw in its smart contracts but rather a result of user error, with the platform taking proactive measures to pause services during its security review. The team emphasized that no other users were affected by the breach, and the pause was a precautionary step to ensure the integrity of the platform. The attacker’s wallet was identified as 0x7fd8…202a, and the stolen assets remained in the wallet, with no attempts to liquidate or transfer them further [2].

In a swift response, Venus Protocol’s stakeholders conducted an emergency vote, during which a plan to liquidate the attacker’s wallet and return the stolen funds to the victim was approved. The action plan was executed in a single transaction, ensuring that no other user positions on the protocol were disrupted. The recovery of the funds marked a successful coordination between protocol stakeholders and security experts, reflecting the growing trend in DeFi communities to take direct action against malicious actors [3].

The incident highlights the increasing sophistication of phishing attacks in the DeFi space, particularly as users interact with complex financial tools and token approvals. Experts emphasize the risks associated with granting access to third-party wallets, as a single malicious transaction can lead to catastrophic losses. In this case, the attacker tricked the user into approving a transaction that granted them control over the wallet’s assets. Security platforms such as Cyvers and PeckShield have reiterated that such attacks are not platform-specific but rather result from individual vulnerabilities and social engineering tactics [4].

The attack on Venus Protocol has added to the growing number of DeFi exploits in 2025, with total losses from crypto-related hacks surpassing $2 billion year-to-date. This figure already exceeds the total recorded in 2024 and includes high-profile breaches such as the $1.4 billion Bybit hack. Analysts have noted that phishing scams and other forms of social engineering are among the most effective and persistent threats in the DeFi ecosystem, especially during periods of market volatility when users may be more susceptible to manipulation [5].

Venus Protocol, with over $2.7 billion in total value locked (TVL) according to DefiLlama, remains one of the largest DeFi lending platforms on the BNB Chain. While the platform experienced a short-term price dip for its native XVS token in the wake of the attack, it has since stabilized. The incident underscores the ongoing need for user education and stronger security practices within the DeFi space, particularly around transaction approvals and wallet management.

Source:

[1] Venus Protocol User Loses $13.5M to a Suspected Phishing Scam (https://finance.yahoo.com/news/venus-protocol-user-loses-13-130314538.html)

[2] Venus Protocol votes to liquidate attacker who stole $13m (https://www.dlnews.com/articles/defi/venus-protocol-votes-to-liquidate-attacker-behind-13m-hack/)

[3] BNB Whale Drained of $27M in DPRK-Linked Phishing Attack (https://finance.yahoo.com/news/bnb-whale-drained-27m-dprk-131603827.html)

[4] Venus Protocol user suffers $13.5M loss from phishing attack (https://cointelegraph.com/news/defi-trader-loses-27m-phishing-scam-venus-protocol-pauses)

[5] Crypto user loses $27 million Venus Protocol assets in phishing scam (https://www.mitrade.com/insights/news/live-news/article-3-1088930-20250902)