Ethereum Lender Term Finance Hit with $8.5 Million Governance Attack

Term Finance, an Ethereum-based lending protocol, suffered an estimated $8.5 million loss after an attacker exploited governance control of its strategy vaults on August 24, 2026.

The attacker, who reportedly bought cheap governance tokens to gain voting power, drained approximately 2,843 Ether (ETH) and 1.68 million USDC from the vaults. The attacker then swapped the USDC for an equivalent amount of DAI.

Term Finance has permanently shut down all Meta Vaults and revoked DAO governance roles in response to the attack, but withdrawals remain open. The core lending and borrowing markets were not affected by the exploit, according to Term Labs.