XVS price slips after $27M Venus Protocol phishing attack

• A Venus network user suffered massive losses after authorizing a malicious transaction.
• The perpetrator took seconds to drain vUSDT, BTCB, vETH, vXRP, and vUSDC.
• The native token plunged sharply after the news.

While the crypto market displayed stability on Tuesday, XVS painted its daily chart red after news surfaced that a Venus Protocol user had encountered a sophisticated phishing scam, resulting in the loss of digital assets worth a whopping $27 million.

What attracted attention is how the incident unfolded.

It was not a weakness in Venus Protocol. The attacker gained complete access to the victim’s assets after a simple mistake.

According to an on-chain investigator, PeckShield:

The perpetrator’s burner wallet instantly drained the assets after the user approved access.

It took seconds to lose a fortune, likely accumulated in years.

Such incidents underscore the brutal reality in the DeFi world, where a simple mistake can translate to disastrous losses.

The numbers reveal how devastating the attack was:

• $19.8M in vUSDT
• $7.15M worth of vUSDC
• $146K in vXRP
• $22K in vETH
• $285 Bitcoin on BNB Chain (BTCB)

The victim lost what most people would consider generational wealth, especially in the crypto industry.

What’s worse is that the hack didn’t happen due to weaknesses in Venus Protocol.

The attacker leveraged the user’s innocence and deception to orchestrate the scam.

Venus Protocol remains secure

One thing that the community would like to know is whether the perpetrator breached the Venus Protocol.

NO. The BNB Chain-based lending and borrowing protocol remained secure and fully operational.

The $27 million loss didn’t stem from a coding flaw, systematic exploit, or bugs in smart contracts.

It is part of the rising trend of social engineering frauds, where attackers trick users into authorizing token approvals.

In June, a New York scammer used social engineering to steal assets worth over $4 million from a Coinbase user.

Another similar incident had a victim losing over $240 million in August last year.

The weak point has nothing to do with the protocol, but the user who’s controlling the wallet.

Thus, the Venus Protocol remained operational after one of its users suffered a devastating loss.

Doesn’t that add to the victim’s frustration?

Risks linked to DeFi’s freedom

Decentralized finance thrived on permissionless technology.

However, that freedom carries significant dangers.

Token approvals ensure streamlined interactions between digital assets and decentralized applications (dApps).

Nevertheless, giving wallets unlimited approvals limits user control.

The powers turn deadly if the wallet belongs to a fraudster.

That’s what the Venus Protocol victim met – a simple approval turned out to be a complete disaster.

Furthermore, DeFi doesn’t have a refund button or helpline.

Mistakes are final in this industry, and the $27 million is likely gone forever.

XVS price outlook

Venus Protocol’s native token turned bearish amidst the scam developments.

It has lost more than 6% on its daily chart after a sharp dip.

XVS trades at $5.99 with an overwhelming selling pressure.

The 400% surge in 24-hour trading volume signals heightened activity, potentially from holders exiting positions to avoid further losses.

Bears dominate XVS’s price charts, hinting at more declines before the altcoin secures footing.

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