$27M Phished, Nearly All Returned: Venus Protocol’s Rapid Governance Saves Whale

On September 2, 2025, a prominent Venus Protocol user on BNB Chain, identified as @KuanSun1990, fell victim to a sophisticated phishing attack.

The incident began when the user unwittingly approved a malicious transaction, granting the attacker access to their holdings, primarily vUSDT and vUSDC. This allowed the perpetrator to drain approximately $27 million in assets from the wallet.

Alerted swiftly, the Venus team paused protocol operations to prevent further exploitation, initiated an emergency governance vote to forcibly liquidate the attacker's positions, repay debts, and recover funds.

Through coordinated efforts, including a 5-hour debt repayment window and a 7-hour liquidation process followed by a 24-hour security review, the victim achieved near-full recovery within a day.

This incident highlights Venus's history of security challenges over recent years:

1. May 2022: Luna Collapse Exploitation – Users exploited price volatility post-Luna crash, draining ~$11 million via borrowing mechanics; markets paused, no permanent bad debt.

2. October 2022: BNB Chain Bridge Hack Fallout – Stolen BNB used as collateral led to $150 million at-risk borrowings; cleared by August 2023 via interventions, averting cascades.

3. December 2023: Binance Oracle Glitch – Misreported prices caused false $54 billion exploit alarm; no losses, but 12% XVS price drop; Oracle safeguards enhanced.

4. February 2025: ERC-4626 Rate Manipulation – Donation attack on wUSDM yielded ~$2,186 ETH profit; bad debt created, prompting new oracles and kill switches.

5. March 2025: Oracle Manipulation – wUSDM price inflated for self-liquidation; brief pauses, reinforced Oracle dependencies.

6. June 2025: $2M Theft Misreport – Initially flagged as exploit, debunked as non-protocol issue; quick clarifications, minimal impact.

Despite these six notable events, Venus's position on BNB Chain remains exceptionally solid, with a TVL of ~$1.91 billion on the chain, ranking it as the second-largest by cumulative fees ($137 million+), behind only PancakeSwap, within BNB Chain's overall ~$7.4 billion TVL as of September 2025.

The reasons why Venus can still maintain a dominant position on the BSC chain are:

• Robust Governance: Rapid response mechanisms, like pauses and votes, minimize damage—for instance, in the September 2025 phishing case, governance enabled quick fund recovery, turning a loss into a win.

• Strong Security Audits: High Certik scores and proactive mitigations build trust, such as post-2025 ERC-4626 attack implementations of kill switches to halt threats instantly.

• Binance Ecosystem Integration: Deep ties enhance liquidity and user adoption, exemplified by reliance on Binance Oracles for stable pricing, attracting millions in daily volume.

• Resilient Liquidity: High TVL sustains operations despite incidents, as seen in maintaining $30 billion+ peaks even after 2022 bridge fallout, drawing consistent capital inflows.

The September 2 event ended as a "Happy Ending," with the whale recovering nearly all losses while the hacker group incurred nearly $3 million in attack costs.

This classic case saw swift responses from all parties, crucially aided by @VenusProtocol in salvaging the user's stolen assets, earning special thanks from the victim.