The decentralized finance platform recovered $13.5 million taken by North Korean cybercriminals in less than 12 hours using emergency governance powers.
On September 2, 2025, hackers targeted a major Venus Protocol user through a fake Zoom application. The victim, later identified as Kuan Sun, fell for the scam and gave attackers control over his account.
The criminals used this access to borrow and withdraw funds on Sun’s behalf. They drained wrapped Bitcoin, USD Coin, Tether, XRP, and Ethereum tokens worth millions. Initial reports suggested losses of $27 million, but the actual theft totaled $13.5 million after accounting for existing debts.
Security firm SlowMist traced the attack back to the Lazarus Group, a hacking team linked to North Korea’s government. This group has stolen billions from crypto platforms, including major attacks on Ronin bridge and other DeFi protocols.
Venus Protocol’s security partners spotted the suspicious activity within minutes. HExagate and Hypernative flagged the transactions immediately, triggering an emergency protocol shutdown.
The platform pause stopped the hackers from moving or hiding the stolen funds. This quick action bought time for Venus to activate its governance system and plan a recovery.
“The protocol’s security partners flagged the suspicious transaction within minutes,” Venus announced on social media. The team confirmed that Venus smart contracts and website remained secure throughout the incident.
Venus used its decentralized governance system to force-liquidate the attacker’s positions. Community members voted to seize the stolen tokens and send them to a recovery address controlled by the protocol.
Source:@VenusProtocol
This marked the first major successful recovery using emergency governance powers in DeFi history. The vote passed quickly, allowing Venus to reclaim the funds before hackers could transfer them elsewhere.
Multiple security firms helped with the recovery effort. PeckShield, Binance, and SlowMist provided analysis and support throughout the 12-hour process.
The XVS governance token dropped 10% when news of the attack broke. Trading volume spiked as investors worried about platform security and stability.
However, XVS recovered its losses after Venus confirmed the successful fund recovery. The quick rebound showed renewed confidence in the platform’s crisis response abilities.
Victim Kuan Sun thanked the recovery teams publicly. “What could have been a total disaster turned into a battle we actually won, thanks to an incredible group of teams,” he wrote on social media.
The incident highlights ongoing risks in decentralized finance. User education remains critical for platform safety as sophisticated attacks continue to target crypto users.
Venus proved that strong governance systems can recover stolen funds when protocols act fast. The emergency vote mechanism worked exactly as designed, turning potential disaster into success.
The attack method – using fake software to trick users – shows how sophisticated crypto criminals have become. Users must verify all downloads and be suspicious of unexpected software requests.
Venus Protocol’s recovery sets a new standard for crisis response in DeFi. The 12-hour timeline from attack to recovery beats most traditional financial systems by days or weeks.
The successful governance intervention raises questions about decentralization versus security. Venus showed that some centralized powers can benefit users when emergencies strike.
Other DeFi platforms will likely study Venus’s response and consider similar emergency mechanisms. The balance between user protection and decentralized control remains a key challenge for the industry.
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