Term Finance Vault Hack: Attackers Drain $8.5 Million

Term Finance has permanently shut down its Meta Vaults due to a governance exploit that allowed attackers to drain approximately $8.5 million in Ethereum (ETH) and stablecoins.

The company, which offers on-chain fixed-rate lending protocol services, halted new deposits while keeping withdrawals open, according to an analysis by PeckShield.

Term Labs said it revoked the vaults' DAO governance roles, but has not confirmed or provided details about the amount of funds drained or promised to cover any potential user shortfall.

The exploit occurred through Term's custom governance wrapper, which is separate from the Yearn V3 architecture used by its underlying protocol and direct borrowing and lending markets.