Sei Network Faces $240K Flash Loan Attack, What’s Next?

• A $240K flash loan attack drained 1.96M WSEI after an accidental transfer funded the exploit.
• The incident was caused by human error, not a smart contract bug. 
• Sei’s March SIP-3 upgrade will end support for USDC.n.

A flash loan attack on the Sei Network drained roughly $240,000 worth of WSEI from the Synnax contract, according to blockchain security firm BlockSec Phalcon. The attacker borrowed 1.96 million WSEI through a flash loan and exited without repayment.

The exploit was not driven by a contract flaw. It was enabled by a mistaken transfer that occurred three blocks earlier. 

How the Attack Happened?

Wallet “0x9748…a714” accidentally sent funds into the Synnax contract, unintentionally seeding liquidity that the attacker later used. Two transactions, labeled TX1 and TX2 by BlockSec, completed the attack path.

The sequence was simple. Funds were mistakenly deposited, borrowed via flash loan, and never returned. The loss was immediate and final. 

The incident is yet another example of a recurring DeFi issue, i.e., operational mistakes can still trigger full-scale exploits, even on high-performance chains like Sei.

Chain Upgrade Raises Additional Risk for Users

The exploit lands as Sei prepares for a major network transition. The team has issued a warning to holders of USDC.n, a bridged version of Circle’s USDC used within the Cosmos ecosystem.

Sei’s upcoming SIP-3 upgrade, scheduled for March, will convert the network into an EVM-only chain. Once the upgrade is complete, Cosmos-native assets will no longer be supported. This includes USDC.n.

The Sei team stated that after the upgrade, USDC.n may become inaccessible or lose value on the network. Users were urged to move their funds before the transition, with migration paths already live.

This is a protocol-level change with a fixed timeline. Any USDC.n left behind after the upgrade faces uncertainty.

SEI Price Holds Key Support 

SEI is trading near $0.12, holding a horizontal support zone that has capped pullbacks since late December. The broader trend remains bearish, with price exiting a multi-month descending channel only to briefly stall.

Selling pressure accelerated from October through December, pushing SEI down more than 60% from its summer highs. The current range reflects stabilization rather than reversal. Momentum indicators show flattening, not expansion.

As long as the price remains above $0.11, the risk of a crash is contained. A break below that level exposes $0.09, followed by the $0.07 low.

To confirm a bullish move, SEI would need to reclaim the mid-range around $0.16-$0.18 and hold it as support. Once there, a long-term target of $1 can be considered.

Related: SEI Breakout Is Real But Continuation Isn’t Guaranteed