The attack involved assets held across three vaults, including Wrapped Bitcoin, Matrixdock Gold XAUm and USDC.
Crypto News
Sui-based liquid staking protocol Volo has confirmed a $3.5 million security breach affecting three isolated vaults, with the team moving to freeze assets and absorb losses rather than pass the impact on to users.
The attack involved assets held across three vaults, including Wrapped Bitcoin, Matrixdock Gold XAUm and USDC. Volo said it detected the breach, immediately notified the Sui Foundation and ecosystem partners to contain the damage, and froze the affected vaults to prevent further exposure. The protocol confirmed that approximately $28 million in total value locked across its remaining vaults was unaffected, with no shared vulnerability identified between the exploited vaults and the rest of the platform.
Recovery efforts have already rescued a portion of the stolen funds. In two separate updates following the exploit, Volo said it had frozen or blocked roughly $2 million of the total amount taken. Approximately $500,000 linked to the breach was frozen in the first recovery action. In a subsequent update, the team said it had successfully blocked an attempt by the attacker to bridge 19.6 WBTC, effectively removing those funds from the attacker’s control. “We are now working with ecosystem partners to determine the best path to return these funds to Volo,” the protocol wrote.
The incident adds to a difficult stretch for DeFi platforms. The exploit follows a separate breach over the weekend targeting liquid restaking protocol Kelp, which lost approximately $292 million, an event the team said has had a ripple effect across the broader ecosystem.
Crypto hacks have caused cumulative losses exceeding $17 billion over the past decade, according to DefiLlama data. Private key compromises account for roughly 22.3% of recorded incidents, with unknown attack methods at 18.2% and phishing attacks on multi-signature wallets at 10%. The data suggests that wallet security and user-side weaknesses are responsible for a larger share of major losses than protocol-level bugs.
Volo said its investigation remains ongoing and that further updates will follow as the recovery process with ecosystem partners progresses.
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