Term Finance Loses $8.5M After Attacker Exploits Governance Voting to Drain Vaults

TLDR

• Term Finance lost an estimated $8.5 million from its Meta Vaults on August 24, 2026
• An attacker drained 2,843 ETH (~$6.87M) and 1.68 million USDC, swapping the USDC for DAI
• The attacker reportedly bought cheap governance tokens to gain voting control of the vaults
• Term Labs has permanently shut down all Meta Vaults and revoked DAO governance roles
• The underlying Term lending protocol was not affected, and withdrawals remain open

Term Finance, an Ethereum-based fixed-rate lending protocol, confirmed it lost around $8.5 million after an attacker exploited governance control of its strategy vaults. Blockchain security firms PeckShield and CertiK both reported the loss, making it one of the more costly DeFi incidents of 2026.

JUST IN: DeFi lender Term Finance reports a governance attack, losses around $8.5M as ~2,843 ETH and $1.68M USDC moved; Yearn V3-based vaults targeted, outer-layer governance flaw implicated. $TERM$ETH? pic.twitter.com/8YUYoeTOVt

- Bpay News (@bpaynews) August 23, 2026

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