An attacker manipulated the THE token’s price on Venus Protocol, draining an estimated $3.7 million in assets. Venus Protocol, the largest lending platform on BNB Chain, has frozen collateral on six additional markets after an attacker exploited THENA’s low-liquidity THE token to drain an estimated $3.7 million in digital assets. The attacker built a large position in THE, inflating its price from roughly $0.27 to nearly $5 according to on-chain researcher Weilin Li. That inflated collateral was used to borrow approximately 20 BTCB, 1.5 million CAKE, and 200 BNB before liquidation triggered a price collapse back to $0.24.
To bypass Venus’s supply cap, the attacker transferred THE tokens directly to the vTHE contract rather than depositing through standard minting. The technique is a known vulnerability in Compound-forked lending platforms. THENA said its security systems flagged the incident around 12 PM UTC and confirmed its smart contracts were not breached. Venus confirmed “unusual activity” in the THE and CAKE markets.
In response, Venus reduced collateral factors to zero on Bitcoin Cash (BCH), Litecoin (LTC), Uniswap (UNI), Aave (AAVE), Filecoin (FIL), and Trust Wallet Token (TWT). The freeze targets markets with capitalization below $2 billion, daily volume under $100 million, DEX TVL below $40 million, and single-user collateral concentration above 60%. As part of our ongoing response to the $THE pool incident, we have reduced the Collateral Factor (CF) of 6 additional markets to 0, effective immediately, until at least the conclusion of this investigation. Security researchers identified the attacker’s address as 0x1a35…6231, which received 7,400 ETH from crypto mixer Tornado Cash before executing the attack.
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