Term Finance Recovers $1M After Oracle Error Triggers $1.6M Liquidation Loss

DeFi Hack Hackers

Crypto Journalist

Amin Ayan

Crypto Journalist

Amin Ayan

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Amin Ayan is a crypto journalist with over four years of experience in the industry. He has contributed to leading publications such as Cryptonews, Investing.com, 99Bitcoins, and 24/7 Wall St. He has...

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Last updated: 

April 27, 2025

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Ethereum-based fixed-rate lending platform Term Finance has recovered $1 million of the $1.6 million lost due to a misconfigured oracle that triggered erroneous liquidations in its Treehouse (tETH) market.

In a statement posted on X, Term Finance detailed the recovery efforts, noting that 223.197 ETH (approximately $400,000) was recaptured internally, while an additional 333 ETH (around $600,000) was secured through negotiations.

The outstanding loss now stands at 362.03 ETH, valued at roughly $650,000 — a significant reduction from the initial impact of 918 ETH.

Term Finance Clarifies Oracle Incident Was a Bug, Not a Hack

Addressing concerns raised by security analysts, Term Finance clarified that the incident was not the result of a hack. Instead, a bug in an updated ETH oracle caused the liquidation error.

“No smart contracts were exploited, and user funds were not directly targeted,” the team emphasized.

However, details regarding the negotiation process for the returned funds remain undisclosed, and Term Finance has yet to provide further comment.

This oracle mishap adds to a growing list of recent vulnerabilities within the DeFi sector.

Just days earlier, Solana-based platform Loopscale suffered a $5.8 million exploit, while crypto exchange Bitget reported a $20 million loss after coordinated manipulation of a lesser-known token market.

Bitget has announced legal action against eight accounts linked to the incident.

Additionally, Impermax Finance fell victim to a flash loan attack over the weekend, resulting in losses exceeding $150,000, according to security firm TenArmor.

The protocol confirmed the breach, promising a detailed post-mortem once investigations conclude.

Recoveries in such cases remain inconsistent across the industry.

Bybit CEO Ben Zhou recently disclosed that following a $1.4 billion hack in February, nearly 28% of the stolen funds had become untraceable after being laundered through mixers and peer-to-peer platforms.

Only a fraction (3.84%) has been successfully frozen.

Crypto Lost $1.6 Billion to Hacks in Q1

In the first three months of 2025, the crypto ecosystem lost a whopping $1,635,933,800 across 39 incidents, according to the blockchain security platform Immunefi.

The report claimed, “Q1 2025 marks the worst quarter for hacks in the history of the crypto ecosystem.”

Most of that was the result of only two hacks of two centralized exchanges. Phemex suffered a $69.1 million loss in January, while Bybit lost $1.46 billion in February.

Subsequently, the total number of losses in the first quarter marks a 4.7x increase compared to Q1 2024. At that time, hackers and fraudsters stole $348,251,217.

Notably, experts assume that the infamous North Korean Lazarus Group is behind the two largest attacks. They stole $1.52 billion, which is 94% of total losses.