Price Manipulation Attacks Drain Crypto Lending Protocols

Rising price manipulation attacks are increasingly affecting crypto traders and lenders, according to blockchain intelligence firm TRM Labs.

These attacks involve an attacker artificially pumping the price of a thinly traded token, then using it as collateral to borrow other assets from a lending protocol. The borrowed assets can be worth millions, while the worthless collateral is abandoned without needing to repay the debt.

TRM Labs reported 32 such cases in 2026, more than any previous year, with price manipulation accounting for about one in eight hacks. However, the share of stolen value has remained relatively flat, suggesting that these attacks have become cheaper and more repeatable.

The total value locked in crypto asset-backed lending platforms increased by 56% to almost $50 billion in the past two years, according to Defillama data. The attacks accelerated despite a sharp drop in the market's record highs, but it has been recovering since August amid the broader crypto price rally.

In one of the biggest attacks, a money market protocol called Tectonic lost over $70 million after an attacker inflated the price of its governance token by 100x in just 20 minutes. However, the Cronos network rolled back the chain, leaving the attacker with around $6 million worth of assets.