Breaking: Venus Protocol Flash-Loan Exploit Targets Low-Liquidity THENA (THE) Token - Millions at Risk
A major flash-loan attack has struck Venus Protocol, exploiting the low-liquidity THENA (THE) token and triggering a cascade of liquidations that slashed THE's price by over 17% in 24 hours. The attacker used tens of millions in THE tokens as collateral to siphon off more than $3.7 million in assets, including 20 BTC, 1.5 million CAKE, and 200 BNB, in a sophisticated exploit that highlights persistent vulnerabilities in DeFi's collateral mechanisms.
Venus hack sparks THE sell-off
The exploit comes in when the crypto market managed to hold on to the recovery after witnessing a heavy sell-off. Its cumulative cap surged marginally to hover around $2.43 trillion. DeFi-linked tokens’ market cap remained green despite the attack, holding near $60 billion. Bitcoin managed to remain above $71,500 while Ether holds $2,100.
On-chain analysis suggests that the exploit may have been larger. Investigators found that an address funded with 7,400 ETH via Tornado Cash plotted a collateral liquidation event. The manipulation left the lending protocol with an approx bad debt of $2.15 million.
Venus Protocol in a post confirmed the unusual activity. It stated the largest lending platform on BNB Chain had detected suspicious transactions involving the THE liquidity pool. It later began an investigation into the matter. The protocol mentioned that only the THE and CAKE markets appeared to be affected.
🔒 Follow-up Update
As we continue to investigate the unusual activity in the $THE pool, we are taking precautionary action by pausing all $THE borrows and withdrawals effective immediately, to prevent any further misuse.
This will remain in effect until the investigation is…
— Venus Protocol (@VenusProtocol) March 15, 2026
It announced some precautionary action by pausing all borrowing and withdrawals. This will come into effect immediately in order to prevent any further misuse. The team said the restrictions would remain in place until the investigation concludes. Venus added that all other markets are unaffected and will continue to operate normally.
THENA’s price has dropped by more than 15% over the last 30 days. THE is trading at an average price of $0.2299 at the press time. However, it has managed to remain up by 12% on a year-to-date basis. However, its 24-hour trading volume spiked by more than 5500% to hit $291 million amid the incident.
Venus tightens risk controls
In a fresh post, Venus mentioned that they have reduced the Collateral Factor (CF) of 6 additional markets to 0. This measure will target markets where a single user holds a disproportionate share of the supplied collateral, it added.
The protocol reported that it applies high-risk thresholds to markets with low liquidity (under $2B cap, $100M volume, $40M DEX TVL) and high single-user concentration (>60%). Venus Protocol has set the collateral factor to zero for BCH, LTC, UNI, AAVE, FIL, TWT, and lisUSD markets as a precaution.
The attack has now been added to a tally of security incidents involving Venus Protocol. In 2021, it saw manipulation of the protocol’s XVS token. This left it with $95 million in bad debt. 2022 left it with $14 million in bad debt linked with the Terra/LUNA collapse. Later that year, the BNB Chain bridge hack allowed attackers to borrow $150M in stablecoins.
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