Binance Bridge Hacker Hit By $30M Liquidation On Venus

A $30M BNB position on the Venus lending protocol belonging to the perpetrator of a $560M hack was liquidated amid the Aug. 17 crypto market crash.

The position was liquidated manually by the BNB Core team after BNB’s price dropped below $220, as per a November 2022 governance proposal passed by Venus. The team chose manual liquidation to minimize the impact of the margin call on-chain, where a liquidity shortfall could have threatened to destabilize the BNB price and pose a contagion risk to BNB Chain’s broader DeFi ecosystem.

BNB last traded for $215.8 after sinking 38% since mid-April, according to CoinGecko. Venus’ XVS token is up 6.5% in the past 24 hours.

In October 2022, the hacker exploited the BNB Chain bridge and minted 2M BNB tokens before using 900,000 BNB as collateral to borrow $150M worth of stablecoins on Venus.

“Following today’s market movement, the BNB Bridge exploiter account was made healthy as promised by BNB Chain using whitelisted liquidation without any resulting shortfall or further impact to BNB,” Venus said.

Venus is the second-largest DeFi protocol on the BNB Chain network with a total value locked of $600M.

The incident highlights the trade-offs associated with the varying degrees of centralization offered by different smart contract networks, with BNB Chain’s willingness to intervene mitigating the risk of the liquidation causing further damage.

In contrast, Michael Egorov, the founder of Curve Finance, recently scrambled to pay down his debts on Ethereum-based lending protocols as the crypto community feared further drawdowns in the price of CRV could lead to nine-figure liquidations on-chain.

July 30 exploits targeting Vyper, a smart contract coding language used by Curve, sparked an abrupt slump in the price of CRV, placing hundreds of millions of dollars worth of CRV-backed loans at risk of liquidation.

With poor on-chain CRV liquidity threatening to leave leading lending protocols on Ethereum with bad debt, Curve’s founder sold off much of his CRV holdings significantly below market value via over-the-counter deals to pay down his loans.