Reviewing the Venus Attack Incident: A Founder Phished, Thieves Liquidated
TechFlow Selected TechFlow Selected
Reviewing the Venus Attack Incident: A Founder Phished, Thieves Liquidated
If decentralization ceases to exist once it becomes inconvenient, did it ever truly exist?
Navigating Web3 tides with focused insightsAuthor: Rekt News
Compiled by: TechFlow
A single click cost $13 million.
A whale at Venus Protocol has just learned the hard way that a Zoom call can cost more than your mortgage.
One malicious video client, one perfectly timed signature, and $13 million vanished faster than a rug pull announcement.
But here's the twist—Venus didn't just watch helplessly as a user got drained.
They shut down their own protocol, urgently called for a vote, and executed DeFi’s most controversial “rescue operation” in under 12 hours.
What started as an ordinary phishing attack turned into a masterclass on whether decentralized protocols can have it both ways.
When saving a whale means exposing a hidden kill switch inside the protocol, who was really saved?
Source: Peckshield, Venus Protocol, Blocksec, Kuan Sun
September 2, 09:05 UTC. A whale at Venus Protocol launched their Zoom client, ready to kick off another day of DeFi operations.
But the seemingly innocent video software had been quietly compromised, giving attackers backdoor access to their entire device.
Why hack the code when you can simply break trust?
Protocols that let others manage your positions without touching your private keys. Usually, these are signed faster than anyone reads the terms of service.
Click. Sign. Instant liquidation.
Six seconds from signature to financial ruin.
One compromised video client handed over control of a $13 million wallet to attackers waiting patiently in the shadows.
Most phishing stories end here—the whale gets rekt, the attacker disappears, and Twitter mocks the victim for a week.
But this time, the thief’s plan was far more ambitious than a simple smash-and-grab.
What happens when stealing millions isn’t enough?
The Heist
UTC 09:05:36. Six seconds after the whale signed their “crypto suicide note,” the attacker launched a flash loan masterpiece.
Exploit transaction: 0x4216f924ceec9f45ff7ffdfdad0cea71239603ce3c22056a9f09054581836286
Venus Protocol’s post-mortem details the attacker’s strategy:
Step One: Flash borrow 285.72 BTCB—why use your own money? DeFi lets you borrow millions without collateral.
Step Two: Use borrowed funds to repay the victim’s existing debt, while adding 21 BTCB from the attacker’s own account. Seemingly generous, but actually a cold-blooded “accounting murder.”
Step Three: Activate the delegation. Transfer all of the victim’s digital assets—including $19.8M in vUSDT, $7.15M in vUSDC, 285 BTCB, and a long list of other tokens. All completely legal, thanks to that “innocent” signature six seconds earlier.
Step Four: The brilliant finishing move. Use the stolen assets as collateral to borrow $7.14M in USDC against the victim’s remaining BNB. The attacker not only emptied the wallet—they made the victim pay for their own robbery.
Step Five: Borrow enough BTCB to repay the flash loan. Transaction complete. Attacker vanishes.
One automated transaction, one wiped-out whale, one very satisfied crypto thief—they just turned someone else’s life savings into their personal collateral playground.
Yet greed often turns hunters into prey.
What happens when a “perfect heist” becomes a suicide mission?
The Response
UTC 09:09. Four minutes after the digital bank robbery, monitoring systems at Hexagate and Hypernative triggered alerts.
This wasn’t just a standard “suspicious transaction detected” warning.
This was a Level 5 alert worth $13 million, and security firms knew exactly who to call.
Venus Protocol’s response? Immediate nuclear option.
From theft to protocol suspension—just twenty minutes. Venus activated their own kill switch, freezing all core functions across the ecosystem.
Lending? Halted. Withdrawals? Terminated. Liquidations? Suspended.
One user fell for phishing, and the entire protocol ground to a halt.
This wasn’t just crisis control—it was financial warfare.
Venus proactively locked down its platform, attempting to trap the stolen assets before they could be moved.
Every single vToken held by the hacker instantly became worthless paper, frozen under Venus’ emergency authority.
But freezing an entire DeFi protocol to save one whale? That’s not a decision a dev team makes alone.
Enter democracy: an emergency governance vote.
When a community has just twelve hours to decide whether to centrally rescue one user’s wealth, can you still call it decentralization?
Lightning Democracy
Venus didn’t just pause the protocol—they convened an emergency “virtual summit” that would make any Web2 crisis team envious.
They called it a “lightning vote.”
After all, nothing says “grassroots governance” like compressing million-dollar decisions into a few hours of Discord chaos.
The proposal was clear:
Phase One: Partially restore functionality (to prevent users from being liquidated).
Phase Two: Force-liquidate the attacker’s position.
Phase Three: Conduct a full security audit to prevent future incidents.
Phase Four: Fully resume Venus operations.
The community’s response? 100% unanimous approval.
Not 99%. Not 98%.
Every single vote backed Venus’ action plan—like some DeFi version of a North Korean election.
Maybe it was true consensus. Or maybe pure self-preservation.
Or perhaps when your protocol is hemorrhaging millions and competitors circle like vultures, dissent becomes a luxury no one can afford.
By afternoon, Venus had authorization.
Next came the execution of DeFi’s most controversial liquidation—requiring bypassing smart contract rules to forcibly seize the attacker’s collateral.
The victim fell into crisis with one wrong transaction signature; now Venus was about to sign the “death certificate of democracy.”
What happens when “code is law” meets emergency override?
The Recovery
UTC 21:36. Twelve hours after the heist, Venus executed their counterattack.
Remember the attacker’s fatal mistake born of greed? Using stolen funds as collateral was about to become the most expensive error in history.
One transaction, multiple commands, maximum controversy.
Liquidation: initiated. Assets seized: confirmed. Liquidation: terminated.
Venus just performed surgery on a live blockchain. Activated the kill switch, grabbed all unclaimed assets, and erased every trace.
The attacker’s “masterpiece” had become their own death sentence. Those stolen collaterals sitting safely in Venus pools?
Suddenly, the protocol’s newly activated “emergency liquidation” power made them fair game.
Greed is poison. Steal millions, use them as collateral, then get liquidated by your own stolen assets.
UTC 21:58. Lights back on. Funds recovered. Crisis over.
But no one talked about the $13 million loss anymore. People discussed how Venus, in 12 hours, proved that “decentralization” was just a marketing slogan.
Turns out your unstoppable DeFi protocol has a very stoppable emergency brake—and when the price is high enough, they’ll pull it without hesitation.
When a revolution needs a king to survive, who’s really being overthrown?
The Victim Speaks
“Though I may be considered a fool, silence is always better than speaking to dispel doubts.”
This is the Twitter bio of Kuan Sun, founder of Eureka Crypto and victim of the $13 million heist, on X.
Speaking of “foolishness,” he published a detailed retrospective explaining exactly how he was deceived.
Venus Protocol also confirmed he was the target of the phishing attack.
The social engineering was deeply sinister.
The attacker began laying the groundwork as early as April, compromising a “Stack Asia BD” contact whom Kuan met at a conference in Hong Kong.
Months of patient cultivation, building trust through familiar yet never overly intimate interactions. The malicious Zoom client had already given the attacker access to his device.
During the fake meeting: “Your microphone isn’t working, please update.” Another layer of deception, masking the attacker’s backend operations.
Then, Chrome browser crashes unexpectedly. “Restore tabs?” Click.
Somewhere along the way, his trusted Rabby wallet extension was replaced with a fake version, stripping away all security warnings.
Withdraw from Venus, just like he’d done thousands of times before.
But this time—no risk warnings, no transaction simulation preview, no safety checks. The compromised frontend disguised an authorization as a regular transaction.
Hardware wallets don’t matter. Rabby’s security features don’t matter. When the frontend is poisoned, even the tightest security setup offers only false confidence.
Worse still, according to the victim, the attack was allegedly carried out by the Lazarus Group—the elite hacking unit of North Korea, which has terrorized the crypto space for years.
He wasn’t fooled by some amateur phisher—he was dismantled by state-level digital warfare experts who’ve likely refined this playbook to perfection.
Now, he thanks Venus Protocol, PeckShield, SlowMist, Chaos Labs, Hexagate, HyperactiveLabs, Binance, and others who helped recover his funds.
A happy ending—thanks to a protocol willing to break its own rules when personal stakes are high.
When the world’s most sophisticated hackers can deceive hardware wallets and security-conscious users, is anyone truly safe in DeFi?
In one transaction, Venus saved a whale and shattered the dream of decentralization.
Twelve hours of coordinated chaos proved that behind every so-called “decentralized” protocol lies a centralized “emergency button,” masked by governance theater.
Yes, the community voted—but when 100% consensus forms faster than a Discord argument about gas fees, you’re witnessing democracy’s greatest magic trick: making authoritarianism look like collective decision-making.
The attacker left empty-handed, the whale got his wealth back, and Venus demonstrated they can override their own code under massive digital pressure.
Mission accomplished. Reputation destroyed.
The real tragedy isn’t that someone fell for a Zoom phishing scam—it’s that we still pretend protocols with emergency powers are fundamentally different from the traditional financial systems they claim to replace.
If decentralization dies the moment it becomes inconvenient, did it ever truly exist?
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
@RektHQ
