Venus Network users suffered a major loss after allowing malicious transactions. It took the perpetrators a few seconds to drain VUSDT, BTCB, VETH, VXRP, and VUSDC. The native token plunged sharply after the news.
The crypto market showed stability on Tuesday, but XVS painted its daily charts red after news emerged that Venus Protocol users had encountered a sophisticated phishing scam.
What caught my eye was how the incident unfolded.
That was not a weakness in Venus’ protocol. The attacker had full access to the victim’s assets after a simple mistake.
According to on-chain investigators, Peckshield:
The victim approved the malicious transaction and granted token approval to the attacker’s address (0x7FD8…202A) for the transfer of assets.
Users of #peckshieldalert @venusprotocol have been released $27 million in code after falling into a #phishing scam.
The victim approved the malicious transaction and granted token approval to the attacker’s address (0x7FD8…202A) for the transfer of assets. pic.twitter.com/nwkvldxxoz– Peckshieldalert (@peckshieldalert) September 2, 2025
The perpetrator’s burner wallet immediately drained the assets after the user approved access.
It took me a few seconds to lose my property, but it probably accumulated over years.
Such incidents highlight the brutal reality of the world of defi. There, simple mistakes can lead to disastrous losses.
The numbers reveal how catastrophic the attack is:
VUSDC$146K VXRP$22K$285 Bitcoin BNB Chain (BTCB) worth $19.8 million at VUSDT
Victims have lost what most people consider to be generational wealth, especially in the crypto industry.
What’s even worse is that the hacks didn’t occur due to weaknesses in Venus’ protocol.
The attackers exploited the user’s innocence and deception to reconcile the fraud.
Venus protocol remains secure
One thing the community wants to know is whether the perpetrator violated the Venus protocol.
no. BNB chain-based lending and borrowing protocols remained secure and fully operational.
The $27 million loss was not due to a smart contract coding flaw, systematic exparoits, or bugs.
This is part of the upward trend in social engineering scams, as attackers trick users into allowing tokens to be approved.
In June, a New York scammer used social engineering to steal more than $4 million in assets from Coinbase users.
Another similar incident saw the victim lose more than $240 million last August.
The weaknesses have nothing to do with the protocol, but the users who control the wallet.
Therefore, after one of the users suffered a catastrophic loss, the Venus protocol remained operational.
Wouldn’t that add to the victim’s frustration?
Freely linked risks of Defi
Decentralized finance flourished with permitted technology.
However, there is an important risk to that freedom.
Token approval ensures streamlined interactions between digital assets and distributed applications (DAPPs).
Nevertheless, giving your wallet unlimited approval limits your user control.
If the wallet belongs to a scammer, the power becomes fatal.
That’s what Venus Protocol victims met. Simple approval turned out to be a complete disaster.
Furthermore, defi does not have a refund button or helpline.
Mistakes are the final thing in this industry, and $27 million could have gone forever.
XVS price outlook
Venus Protocol’s native tokens have become bearish amid the development of fraud.
After a sharp dip, I lost over 6% on my daily chart.
XVS trades at $5.99 with overwhelming sales pressure.
A 400% surge in 24-hour trading volume has increased activity from potential holders leaving their location to avoid further losses.
The bear dominates the XVS price chart, suggesting a further decline before Altcoin secures footing.
