Venus Protocol Proves Decentralized Defense Can Outwit State-Sponsored Hackers

Generated by AI AgentCoin World
Monday, Sep 8, 2025 9:53 am ET1min read
USDC
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Aime RobotAime Summary

- Venus Protocol recovered $11.4M in crypto for Eureka Trading CEO Kuan Sun after a phishing attack exploited a fake Zoom client to steal $13M in assets.

- The platform paused operations within 20 minutes, conducted a 12-hour investigation, and executed a community-approved forced liquidation to secure funds.

- Security firms PeckShield and Hexagate aided recovery, while Lazarus hackers were identified as perpetrators using a forged Rabby plugin to bypass defenses.

- The incident highlighted DeFi vulnerabilities in social engineering attacks, with XVS token price stabilizing post-event to reflect community confidence in governance.

Venus Protocol, a decentralized lending platform, successfully returned approximately $11.4 million in crypto assets to user Kuan Sun, CEO of Eureka Trading, after a phishing attack compromised his funds. The incident, which occurred on September 2, involved Sun signing a malicious transaction on a fake

Zoom
client, inadvertently granting attackers access to his wallet. The stolen assets included
USDT
,
USDC
, FDUSD, and others, valued at around $13 million at the time.

The platform acted swiftly, pausing operations within 20 minutes of identifying the breach and initiating a comprehensive investigation. Within less than 12 hours, Venus confirmed the safety of its platform and executed a community-approved forced liquidation of the attacker's wallet, recovering the funds. On-chain security firms PeckShield, Hexagate, and Hypernative Labs were instrumental in the recovery process, providing critical support in tracking and securing the assets.

Venus Protocol's governance and community-driven approach played a key role in the successful resolution. Kuan Sun praised the protocol’s decision to pause operations as a difficult but necessary step, emphasizing that protecting users was the top priority. The platform's transparency and rapid response were widely commended on social media, highlighting the importance of such actions in a landscape where phishing scams continue to rise. According to CertiK’s mid-year report, phishing attacks caused $410 million in losses across 132 incidents in the first half of 2025 alone.

The incident also drew attention to the ongoing challenges in securing crypto assets, particularly through social engineering tactics such as deepfake videos, fake plugins, and impersonation. The attackers were later identified as belonging to the Lazarus hacker group, known for sophisticated cyberattacks. The use of a forged Rabby plugin in this case demonstrated how even experienced users can fall victim to tailored phishing attempts, underscoring the need for heightened vigilance.

Despite the initial volatility in the XVS token price following the incident, the asset has since stabilized and returned to pre-event levels. According to CoinGecko, XVS has seen a 1.4% increase in the past 24 hours, closing at $6.28. This resilience reflects the community’s confidence in Venus Protocol’s governance and security measures.

The case also highlights broader concerns about the security of digital assets in decentralized finance (DeFi), where users often rely on plugins and front-end interfaces that can be exploited. The incident serves as a reminder of the importance of verifying wallet approvals and staying informed about emerging threats. As the crypto space evolves, platforms like Venus must continue to prioritize user education and proactive security measures to mitigate risks.

Source:

[1] Venus Protocol returns $11 million in crypto to phishing victim (https://www.theblock.co/post/369762/venus-protocol-returns-lost-funds-phishing)

[2] Venus attackers are Lazarus hacker group, caused by a (https://www.odaily.news/en/newsflash/446642)