Term Labs: Affected Treasury Fixed-Rate Loan Positions Fully Recovered, Incident Unaffected Term V1/V2 Contracts

BlockBeats News, September 3rd. According to an official announcement from Term Labs, significant progress has been made in the Term Vault incident handling. All affected fixed-rate loan positions in the vault have been successfully recovered, with the final recovery operation completed on August 25th at 14:52 UTC.

Term Labs stated that the incident is currently believed to have only affected the liquidity assets held in the Term Vault, while the Meta Vault and related strategies remain closed. The team has not identified any attacks on the Term V1 and V2 contracts during the incident. The direct lending market was not affected, and the supply, repayment, and liquidation functions are all operating normally.

According to technical analysis, the attacker used Tornado Cash to fund the operating wallet and exploited a governance proposal to reset the governance delay of multiple strategies to zero, bypassing the LP's additional protection window. Subsequently, the attacker deployed counterfeit controllers, price adapters, and fake Repo tokens, manipulating strategy parameters and price mechanisms to siphon off some ETH and USDC assets from the strategies.

Term Labs mentioned that they are currently collaborating with law enforcement agencies and cybersecurity firms to investigate the attacker's identity and have provided information to assist in the investigation. The affected Meta Vault and strategies have been closed, and the remaining low-activity Vaults are being processed. Fixed-rate loans on Term were not previously targeted in the attack. However, to mitigate risks due to possible redemption into affected Vaults post-maturity, the relevant contracts have been prematurely upgraded and migrated.