Venus governance token XVS dropped more than 9% after an exploit in the Thena market left Venus with about $2.15 million in bad debt. An attacker — partly funded by 7,400 ETH withdrawn from Tornado Cash — accumulated THE over nine months, donated >36 million THE to the vTHE contract to bypass cap checks and inflate THE’s exchange rate ~3.8x, then used THE as collateral to borrow and buy more THE. THE rose from ~$0.26 to ~$0.56 before the attacker sold, triggering a >17% drop and liquidations. Analysis estimates the attacker withdrew roughly $3.7–$5.8 million (including tokenized bitcoin, BNB and stablecoins). Damage was largely confined to THE and, to a lesser extent, CAKE; no user funds were lost outside affected pools. Venus paused THE borrows/withdrawals, set THE’s collateral value to zero, tightened at-risk markets, said oracles continued working, and governance may consider covering losses via the risk fund. Venus said this was not a flash-loan attack.

XVS price fell >9% following a concrete exploit that left $2.15M in bad debt; attacker manipulation inflated THE’s exchange rate ~3.8x and caused THE to spike then crash >17%, leading to liquidations and an estimated $3.7–$5.8M extraction. Venus paused THE markets and set THE collateral to zero. These are direct, verifiable protocol-level actions and realized losses that can move short-term market prices for XVS and affected tokens.