Venus Protocol released a statement regarding the THE market attack incident. This event affected the Venus Core market, while Venus Flux remained unaffected. The team stated that this incident was not a flash loan attack. The attacker continuously accumulated THE tokens over the past 9 months and exploited a supply cap bypass vulnerability in legacy protocol code by directly transferring funds to the protocol contract, bypassing the 14.5 million THE supply cap. Subsequently, the attacker manipulated the THE price by exploiting low liquidity on on-chain DEXs, and continuously amplified collateral value through recursive loops (borrowing assets, swapping them back for THE to push up the price, and injecting them back into the market). Currently, Venus has suspended the THE market and set its collateral factor (CF) to 0. As a precautionary measure, it has also suspended collateral functionality for the BCH, LTC, AAVE, POL, FIL, TWT, UNI, and lisUSD markets. Venus Labs is conducting an investigation with security partners and will release a complete post-mortem report.