On-chain data shows Venus Protocol was exploited through a flash-loan-driven price manipulation involving THE token. The attacker extracted more than $3.7 million in assets and left the protocol with $2.18 million in bad debt. The mechanism was straightforward: inflate the collateral price, borrow stronger assets against it, then sell the collateral back into the market.
The attack started with 7,400 ETH
According to the source material, the attacker address 0x1a35…6231 received 7,400 ETH from Tornado Cash. That ETH was then used as collateral on Aave to borrow nearly $10 million in stablecoins. The funds were moved across multiple wallets and used to buy THE on several exchanges, forcing the token sharply higher.
THE was pushed from $0.26 to $0.56. With the price elevated, the attacker deposited 36.1 million THE into Venus. Because the protocol valued the collateral at the pumped market price, it allowed the attacker to borrow real assets, including 20 BTC, 1.5 million CAKE, and 200 BNB.
Dumping followed the borrow, and THE fell to $0.2183
Once the loans were secured, the attacker sold THE back into the market. The move erased the support created during the buying phase. The source says THE dropped more than 20% within 24 hours to $0.2183. As the token fell, the collateral posted on Venus lost value quickly, leaving the protocol unable to fully cover what had been borrowed.
CoinMarketCap data cited in the material shows trading volume in THE surged 7,044% to $331.3 million. That spike points to heavy turnover during the exit. Venus attempted to liquidate tens of millions of Thena tokens used as collateral, but the market could not absorb that volume fast enough.
THE remains under pressure with $0.200 in focus
The technical section in the source describes a token under severe stress. In the bearish case, THE could break below the $0.200 psychological level and test support near $0.180. The source also notes that MACD was showing negative momentum at the time, matching the downward move.
A rebound case was also outlined. If selling pressure cools and THE holds around $0.218, while RSI stabilizes above the oversold zone, the token could recover toward $0.250. Even so, the short-term path still depends on whether the market can absorb liquidated supply tied to the exploit.
A textbook DeFi collateral manipulation setup
The sequence was clear: buy aggressively to lift the price of a thinner asset, post that asset as collateral on a lending protocol, borrow more liquid tokens, and then unwind by selling the collateral. The source also says the attacker likely profited from long exposure during the pump and short exposure during the dump on centralized exchanges, though it does not provide confirmation beyond that claim.
At the time of publication, THE was still lagging a broader rising market. The incident on Venus, running on BSC, highlights how exposed DeFi protocols remain when collateral pricing, liquidity depth, and liquidation capacity fail under sudden stress.