A user on the Venus Protocol, a decentralized lending platform, experienced a significant loss of $13.5 million after inadvertently authorizing a fraudulent transaction.
The incident was not caused by any vulnerability within the Venus Protocol itself. Instead, it stemmed from a phishing scheme where the user was deceived into granting unauthorized access to their digital wallet.
PeckShield, a blockchain security company, initially disclosed the event on September 2, reporting an estimated loss of roughly $27 million. The firm later revised this number to $13.5 million, taking into account the user’s existing debt.
Did you know?
Subscribe – We publish new crypto explainer videos every week!
What is a Crypto Wallet? (Explained With Animation)
Responding to the community’s concerns, Venus Protocol addressed the matter. The development team clarified that the platform’s technology functioned as intended and the issue seemingly originated from the user’s own actions.
When questioned about the cause being user error, Venus Protocol stated:
Current indications suggest that this is the case. We will provide updates as our investigation proceeds.
To conduct internal security assessments, the platform was briefly put on hold.
Despite the fact that Venus Protocol’s systems remained unaffected, the team made the decision to temporarily halt operations to assure the security of the network. They also reinforced that smart contracts were secure and functioning properly.
This phishing scam occurred around the same time as another incident targeting users holding WLFI governance tokens from World Liberty Financial. These individuals were also subjected to a separate wallet exploit on the same day. To learn more, read the complete story.