If decentralization becomes inconvenient, will it cease to exist? Did it ever truly exist?
Author: Rekt News
Translation: Deep Tide TechFlow
Click here to lose 13 million dollars.
A whale from Venus Protocol has just learned through a painful experience that the cost of a Zoom call can be higher than your mortgage.
A malicious video client, a perfectly timed signature, 13 million dollars disappeared faster than a rug pull announcement.
But the twist in the story is that—Venus did not just stand by and watch users get drained without taking action.
They shut down their protocol, urgently called for a vote, and completed the most controversial "rescue operation" in the DeFi space in less than 12 hours.
What initially seemed like a routine phishing attack ultimately evolved into a masterclass on whether decentralized protocols can have their cake and eat it too.
When saving a whale means exposing hidden termination switches in the protocol, who is truly saved?
Sources: Peckshield, Venus Protocol, Blocksec, Kuan Sun
September 2, 09:05 UTC. A whale from Venus Protocol launched their Zoom client, ready to start a new day of DeFi business.
But the seemingly innocent video software was quietly compromised, allowing attackers to access their entire device through a backdoor.
Why crack the code? Isn't it simpler to breach trust directly?
A protocol that allows you to manage your positions without touching private keys. Generally, signing these agreements is faster than reading the terms of service.
Click. Sign. Instant "liquidation."
From signature to financial ruin, just six seconds.
A compromised video client thus handed over the management rights of a $13 million wallet to the patient attackers waiting for their opportunity.
Most phishing stories end here—the whale suffers, the attacker disappears, and the mockery of the victim continues on Twitter for a week.
But this time, the thief's plan was far more ambitious than a simple "clean out."
What happens when stealing millions of dollars is not enough to satisfy?
The Heist
09:05:36 UTC. Just six seconds after the whale signed their "crypto suicide pact," the attacker launched a "masterpiece" of a flash loan.
Exploiting the vulnerability: 0x4216f924ceec9f45ff7ffdfdad0cea71239603ce3c22056a9f09054581836286
Venus Protocol's post-attack analysis detailed the attacker's operational strategy:
Step 1: Flash borrow 285.72 BTCB—after all, why use your own money? DeFi allows you to borrow millions without collateral.
Step 2: Use the borrowed funds to pay off the victim's existing debts while adding 21 BTCB from the attacker's own account. It seems generous, but it's actually a cold-hearted "accounting murder."
Step 3: Activate delegated permissions. Transfer all of the victim's digital assets—including $19.8 million in vUSDT, $7.15 million in vUSDC, 285 BTCB, and a long list of other tokens. This is all completely legal because that "naive" signature from six seconds ago authorized it.
Step 4: A brilliant strike. Use these freshly stolen assets as collateral to borrow $7.14 million in USDC based on the victim's remaining BNB. The attacker not only drained the wallet but also made the victim pay for their own "theft."
Step 5: Borrow enough BTCB to repay the flash loan. The transaction completed, the attacker quietly vanished.
An automated trade, a drained whale, a very satisfied crypto thief—they just turned someone else's life savings into their collateral playground.
However, greed often turns hunters into prey.
What happens when a "perfect heist" turns into a "suicide mission"?
Countermeasures
09:09 UTC. Four minutes after the digital bank heist, Hexagate and Hypernative's monitoring systems began to sound alarms.
This was not an ordinary "suspicious transaction detected" alert.
This was a level five alarm for a $13 million heist, and the security company immediately knew who to contact.
Venus Protocol's response? The nuclear option was activated.
From theft to protocol suspension, it took only twenty minutes. Venus activated their own termination switch, freezing all core functions of the entire ecosystem.
Lending? Stopped. Withdrawals? Terminated. Liquidations? Paused.
One user fell victim to phishing, and the entire protocol came to a standstill.
This was not just crisis control—it was a financial battle.
Venus decisively restricted their own platform, attempting to trap the stolen goods taken by the attacker.
Every vToken held by the hacker instantly turned into worthless scraps of paper, locked under Venus's emergency permissions.
But freezing an entire DeFi protocol to save one whale? Such a decision could not be made unilaterally by the development team.
Thus, democracy came into play: emergency governance vote.
When the community has only twelve hours to decide whether to save a user's wealth through centralized means, can you really call it decentralized?
Flash Democracy
Venus not only paused the protocol but also convened an emergency "online meeting" that any Web2 crisis management team would envy.
They called it "flash voting."
After all, nothing embodies "grassroots governance" more than compressing a multi-million dollar decision into a few hours of intense debate on Discord.
The proposal was straightforward:
Phase 1: Partial restoration of functions (to prevent users from being liquidated).
Phase 2: Forced liquidation of the attacker's position.
Phase 3: Conduct a comprehensive security audit to prevent similar incidents from happening again.
Phase 4: Fully restore Venus's operations.
The community's response? 100% unanimous approval.
Not 99%. Not 98%.
Every single vote supported Venus's action plan, as if it were some sort of DeFi version of a North Korean election result.
Perhaps this is true consensus, or perhaps it is self-preservation.
Or when your protocol is bleeding millions of dollars while competitors circle like vultures, disagreement becomes a luxury that no one can afford.
By the afternoon, Venus had received authorization.
Next came the execution of the most controversial liquidation operation in DeFi history—an operation that required bypassing smart contract rules to forcibly seize the attacker's collateral.
The victim was in crisis due to a mistaken transaction signature, and Venus was about to sign the "death certificate of democracy."
What happens when "code is law" meets emergency permissions?
Recovery Action
21:36 UTC. Twelve hours after the theft, Venus executed their counterattack.
Remember the mistake the attacker made out of greed? Using the stolen funds as collateral was about to become the most expensive blunder in history.
One transaction, multiple commands, igniting the greatest controversy.
Liquidation: Initiated. Asset seizure: Completed. Liquidation: Closed.
Venus just performed surgery on a running blockchain. They activated the termination switch, seized all unlocked assets, and destroyed all evidence.
The attacker's "masterpiece" ultimately became their own death sentence. Were the stolen collateral safely lying in Venus's liquidity pool?
Suddenly, the protocol's newly activated "emergency liquidation" power became a fair game.
Greed is a poison. Stealing millions, using it as collateral, and then being liquidated by one's own stolen funds.
UTC 21:58. Lights restored. Funds recovered. Crisis averted.
But no one talks about the $13 million loss anymore. What people discuss is how Venus proved in these 12 hours that "decentralization" is merely a marketing slogan.
It turns out that your unstoppable DeFi protocol has a very stoppable emergency brake—and when the cost is high enough, they do not hesitate to use it.
When a revolution requires a king to maintain it, who exactly is being overthrown?
Victim's Voice
"While it may be considered foolish, it's better to remain silent than to speak up and eliminate all doubts."
This is Kuan Sun, the founder of Eureka Crypto and the victim of this $13 million theft, Kuan Sun's Twitter profile.
Speaking of "foolishness," he published a detailed retrospective explaining how he was deceived.
Venus Protocol also confirmed that he was the victim of a phishing attack.
This social engineering tactic is quite sinister.
The attacker began laying the groundwork back in April, infiltrating a "Stack Asia BD" contact that Kuan Sun met at a conference in Hong Kong.
Months of patient groundwork gradually built trust through a familiar yet not overly intimate relationship. The malicious Zoom client had already provided the attacker with access to his device.
During the fake meeting: "Your microphone is not working, please upgrade." This was another layer of deception, covering the attacker's operations in the background.
Then, the Chrome browser unexpectedly crashed. "Restore tabs?" Click.
Somehow, the trusted Rabby wallet extension was replaced with a fake version, removing all security warnings.
Venus withdrawal, just like he had done thousands of times before.
But this time, there were no risk warnings, no transaction simulation previews, no security checks. The compromised frontend disguised a single authorization operation as a regular transaction.
Hardware wallets didn't matter. Rabby's security features didn't matter. When the frontend is poisoned, even the tightest security settings only provide a false sense of security.
Worse still, according to the victim's recollection, this attack was allegedly carried out by the Lazarus Group, an elite hacking organization from North Korea that has been terrorizing the cryptocurrency space for years.
This time, he wasn't phished by some rookie but was precisely taken down by state-level digital warfare experts who may have honed this attack process to perfection.
Now, he expresses gratitude to Venus Protocol, PeckShield, SlowMist, Chaos Labs, Hexagate, HyperactiveLabs, Binance, and others who helped him recover his funds.
This is a happy ending, thanks to a protocol willing to break its own rules when personal interests are at stake.
When the world's most seasoned hackers can deceive hardware wallets and security-conscious users, is anyone truly safe in DeFi?
In one transaction, Venus saved a whale while shattering the dream of decentralization.
The twelve hours of coordinated chaos proved that behind every so-called "decentralized" protocol lies a centralized "emergency button" masked by governance mechanisms.
Of course, the community voted—but when 100% consensus is reached faster than a Discord debate about gas fees, you witness the greatest magic of democracy: making autocracy appear as collective decision-making.
The attacker left empty-handed, the whale reclaimed their wealth, and Venus demonstrated that they could overturn their own code at any time when faced with immense digital pressure.
Mission accomplished, reputation destroyed.
The real tragedy is not that someone fell victim to a Zoom phishing scam, but that we still pretend that protocols with emergency permissions are fundamentally different from the traditional financial systems they claim to replace.
If decentralization ceases to exist when it becomes inconvenient, did it ever truly exist?
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