Venus Protocol Exploit Leaves DeFi Platform With $2M In Bad Debt

The Venus Protocol, one of the largest decentralized lending platforms on BNB Chain, suffered a price manipulation exploit involving the low-liquidity THE token.

The attacker artificially inflated the token’s price by repeatedly depositing it as collateral and borrowing other assets against it. As the token price increased, the attacker continued the loop, pushing the price significantly higher.

Eventually the position was liquidated when market conditions reversed, leaving the protocol with approximately $2.15 million in bad debt.

Investigators said the attacker used funds originating from Tornado Cash to execute the exploit. The protocol has since paused borrowing and withdrawals involving the affected token while the incident is investigated.

Although the exploit created losses for the platform, analysts believe the attacker may not have made significant profits from the on-chain activity.

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