In a remarkable first for decentralized finance (DeFi), the Venus Protocol successfully recovered $13.5 million stolen by North Korea’s Lazarus hackers.
The recovery was executed through an emergency on-chain governance vote, showcasing a new and powerful aspect of decentralized decision-making. The attacker’s wallet was frozen and liquidated within just 12 hours of the hack, a speed that often surpasses traditional centralized finance (CeFi) systems in responding to security breaches.
Venus Protocol recovers in the on-chain hack recovery
The incident began when hackers exploited a vulnerability, though the platform itself was not breached. The stolen funds were quickly identified, and the Venus community and development team mobilized to propose an emergency measure. Token holders, through a rapid on-chain vote, approved the forcible liquidation of the hacker’s positions and the freezing of the stolen assets, allowing the funds to be transferred to a secure recovery wallet.
This event has sparked a debate on the trade-offs between decentralization and security. While some argue that a truly decentralized system shouldn’t have the ability to reverse transactions, proponents of the Venus Protocol’s action point to the swift and effective mitigation of losses as proof that a community-governed approach can be a powerful tool for protecting users.
This phishing scare shows just how advanced attackers are these days. We encourage everyone to read @KuanSun1990‘s story to learn how to better protect yourself.The key is to always verify. Whether it’s transactions, people, or dApps. https://t.co/gzvRqGcSkr pic.twitter.com/YlSltYoloL
— Venus Protocol (@VenusProtocol) September 7, 2025
This successful recovery could set a precedent for how DeFi platforms handle future security incidents, highlighting the potential for decentralized communities to act decisively in a crisis.