Term Finance: Hostile Governance Takeover Sparks Significant $8.5M Loss

TL;DR

• Term Finance lost approximately $8.5M after an attack in which an external actor acquired majority control of its governance token.
• The attacker stole 2,843 ETH and 1.68 million USDC, equivalent to 68% of the assets deposited in the protocol’s Meta Vaults.
• The team permanently shut down the affected product, blocked new deposits, and removed the governance permissions that allowed vault modifications.

The Ethereum-based lending platform Term Finance suffered estimated losses of $8.5 million after an attacker acquired enough voting power to take control of its Meta Vaults and drain the funds deposited in them. The incident was reported by the protocol’s team.

According to on-chain data cited by the monitoring service Defimon, the attacker purchased on the open market a majority of the project’s governance token, which was widely dispersed and had little demand. That position granted the voting rights needed to approve proposals that transferred operational control of the vaults.

Update: All Term Meta Vaults were shut down and dao governance roles have been revoked. This shutdown is irreversible and permanently prevents further deposits. Withdrawals remain open.

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