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While the crypto market displayed stability on Tuesday, XVS painted its daily chart red after news surfaced that a Venus Protocol user had encountered a sophisticated phishing scam, resulting in the loss of digital assets worth a whopping $27 million.
What attracted attention is how the incident unfolded.
It was not a weakness in Venus Protocol. The attacker gained complete access to the victim’s assets after a simple mistake.
According to an on-chain investigator, PeckShield:
The victim approved a malicious transaction, granting token approval to the attacker’s address (0x7fd8…202a) for asset transfer.
#PeckShieldAlert A user of @VenusProtocol has been drained ~$27M in crypto after falling for a #phishing scam.
The victim approved a malicious transaction, granting token approval to the attacker’s address (0x7fd8…202a) for asset transfer. pic.twitter.com/NwkVlDxxOZ— PeckShieldAlert (@PeckShieldAlert) September 2, 2025
The perpetrator’s burner wallet instantly drained the assets after the user approved access.
It took seconds to lose a fortune, likely accumulated in years.
Such incidents underscore the brutal reality in the DeFi world, where a simple mistake can translate to disastrous losses.
The numbers reveal how devastating the attack was:
The victim lost what most people would consider generational wealth, especially in the crypto industry.
What’s worse is that the hack didn’t happen due to weaknesses in Venus Protocol.
The attacker leveraged the user’s innocence and deception to orchestrate the scam.
One thing that the community would like to know is whether the perpetrator breached the Venus Protocol.
NO. The BNB Chain-based lending and borrowing protocol remained secure and fully operational.
The $27 million loss didn’t stem from a coding flaw, systematic exploit, or bugs in smart contracts.
It is part of the rising trend of social engineering frauds, where attackers trick users into authorizing token approvals.
In June, a New York scammer used social engineering to steal assets worth over $4 million from a Coinbase user.
Another similar incident had a victim losing over $240 million in August last year.
The weak point has nothing to do with the protocol, but the user who’s controlling the wallet.
Thus, the Venus Protocol remained operational after one of its users suffered a devastating loss.
Doesn’t that add to the victim’s frustration?
Decentralized finance thrived on permissionless technology.
However, that freedom carries significant dangers.
Token approvals ensure streamlined interactions between digital assets and decentralized applications (dApps).
Nevertheless, giving wallets unlimited approvals limits user control.
The powers turn deadly if the wallet belongs to a fraudster.
That’s what the Venus Protocol victim met – a simple approval turned out to be a complete disaster.
Furthermore, DeFi doesn’t have a refund button or helpline.
Mistakes are final in this industry, and the $27 million is likely gone forever.
Venus Protocol’s native token turned bearish amidst the scam developments.
It has lost more than 6% on its daily chart after a sharp dip.
XVS trades at $5.99 with an overwhelming selling pressure.
The 400% surge in 24-hour trading volume signals heightened activity, potentially from holders exiting positions to avoid further losses.
Bears dominate XVS’s price charts, hinting at more declines before the altcoin secures footing.
In the latest announcement on France and Luxembourg collaborating on the Venus project, it was revealed that both institutions are proposing cross-border settlements.
The Central Bank of France and the central bank of Luxembourg have partnered to roll out the “Venus Initiative”, which allows them to use an experiential CBDC for a 100 million euros bond. Worth $104 million, the bond is the latest means employed in a series of trials in tokenized financial markets. Apart from France and Luxembourg central banks, the Venus Initiative involved Goldman Sachs (NYSE: GS), Santander, Societe Generale, and European Investment Bank (EIB). The EIB appointed Goldman Sachs Bank Europe SE, Santander, and Societe Generale to be in charge of issuing and distributing the digital native bonds.
The General Director of Financial Stability and Operations at Banque de France, Nathalie Aufauvre, had something to say about the project. He said the Venus Initiative had brought both the France and Luxembourg central banks together. He explained further:
“It shows how digital assets can be issued, distributed and settled within the Eurozone, in a single day. The Venus initiate confirms that a well-designed CBDC can play a critical role in the development of a safe tokenized financial; asset space in Europe. It also aims to contribute to the Eurosystem’s reflections on how to improve our services to the wholesale market in particular under the upcoming DLP Pilot Regime regulation adopted by the European Union.”
Meanwhile, the French central bank has been conducting a series of CBDC tests to manage liquidity in decentralized finance. The bank is also working on using central bank digital currency in settling cross-border transactions. In September, the financial institutions unveiled new projects targeted at achieving the benefits of CBDCs use at the wholesale level. A governor at the bank, Villeroy de Galhau, said a wholesale CBDC would help in both cross-border and cross-currency payments. He also revealed that the European Central Bank is considering issuing a digital euro as soon as 2026.
In the latest announcement on France and Luxembourg collaborating on the Venus project, it was revealed that both institutions are proposing cross-border settlements. Gaston Reinesch noted:
“With the EIB innovative issuance under the Luxembourg law, the Banque de France and the Banque centrale du Luxembourg are proposing one possible cross-border answer to the growing interest from the market to perform digital native securities settlements with a Central Bank Money token.”
In the US, the federal reserve bank of New York announced plans to launch a 12-weeks proof-of-concept pilot/ The program was designed to involve major commercial banks like BNY Mellon (NYSE: BK), Citi (NYSE: C), and more. The aim is to conduct advanced research on “asset tokenization and the future of financial market infrastructures in the US as money and banking evolve.
Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience.
Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.