BlockThreat - Week 45, 2025

Peter Kacherginsky

16 Nov 2025 • 10 min read

Greetings!

More than $132M were stolen this week across seven incidents. Smart contract exploits, systemic stablecoin depegs and liquidity crunches, kidnappings, and much more happened last week. However, this edition focuses on the largest smart contract exploit this year - the Balancer hack.

On November 3, 2025, Balancer experienced a highly coordinated attack across seven chains. A bad actor exploited a subtle rounding error to steal more than $128M. There are plenty of excellent writeups on the exploit itself and you can find much more in the premium section below. Instead, I want to focus on something positive amid all of this destruction. The story of how the community, blockchain security companies, chain and protocol operators worked together with remarkable coordination to fight back against the attacker and in many instances win!

Here are just some of the incident response actions by Balancer and many affected chains and protocols:

Balancer paused affected pools, gauges, incentives across chains in 20min.
Stakewise executed emergency multisig to claw back $20.7M in osETH and osGNO tokens.
Monerium froze attacker’s 1.3M EURe.
Berachain quickly disabled affected pools while coordinating gradual shutdown of bridges and eventually halting the chain.
Sonic immediately froze* attacker’s addresses using a built-in safety mechanism.
Polygon chain started to sensor attackers’ addresses.
Gnosis chain partially halted canonical bridge.

*Simply freezing ERC20 transfers was not sufficient since attackers were able to bypass them with permit approvals.

Balancer responded within a twenty minute window by pausing pools. It slowed the attacker a bit, but they were still able to redeploy and continue a second wave almost an hour after the first attack. Protocols with centralized control over their tokens such as osETH, osGNO, and EURe were able to intervene and freeze specific stolen tokens. And that was when the nuclear option was activated. Multiple chains patched their validators to either censor the attacker’s transactions or halt their chain entirely. This level of control is normally frowned upon since the original Dao hack. However, these were exceptional measures for an exceptional scenario.

While the protocols were busy defending themselves, whitehats stepped in and began actively attacking the attacker:

Bitfinding bot frontran exploiter on Base chain to recover almost $1M.
A frontrunning bot operator on Berachain was able to intercept $12M worth of stolen funds and agreed to return funds.
Another frontrunning bot operator on Base returned $150K.
Yet another frontrunning bot operator on Arbitrum returned about $82K.
SEAL/Certora rescue operation recovered $4.1M across Ethereum, Optimism (Beets), Arbitrum chains a few days after the hack.

Just as the attacker was trying to execute their exploit on different chains, various financial and a dedicated defensive bots activated to immediately intercept $13M. In one case, a Bitfinding bot was able to deploy an exploit contract on Base minutes before the attacker. SEAL and Certora teamed up to execute a separate $4.1M rescue for the yet unexploited vulnerability in Balancer.

After the dust settled, almost $18M were intercepted or returned relative to the $128M stolen. A disastrous incident, yet it offers ideas for what worked or could work in the future.

Balancer had an emergency action script ready. If only it had triggered immediately after the first exploit on mainnet. There is an opportunity for projects to improve automation and perhaps err on the side of caution, pausing first and asking questions later.
Warrooms worked perfectly with chains, protocols, and security researchers all coordinating the best possible actions to slow the exploit and fight back. Protocols should regularly practice fictional warroom scenarios to build up their incident response muscle.
The real winners in this incident were the bots and Bitfinding’s bot in particular. Building dedicated defensive bots is truly the next frontier which is barely explored in our industry and yet already shows how effective it can be. The Berachain bot alone intercepted the majority of the attacker’s funds, an astounding $12.6M!

It is a dark day for the industry and Balancer in particular. But we will take time to patch ourselves up and most importantly learn valuable lessons from these incidents that will ultimately make the industry stronger and more resilient for the fights ahead.

In other news, a mistrial was declared in the case against Anton and James Peraire Bueno after the jury failed to reach a unanimous verdict and reported sleepless nights and crying. As you recall, the brothers used their validator to send a specially crafted block that exploited a vulnerability in a relay which tricked it into revealing normally hidden block transactions. They then used those transactions to sandwich other bots. The defense, and surprisingly Coin Center, chose to omit the small detail that a software flaw was exploited and instead framed the issue as nothing more than greedy MEV operators who should accept a bad trade. In other words, the classic Code is Law argument.

Unsurprisingly, all of this overwhelmed the jurors. Now we may end up with a legal precedent that could legitimize blockchain exploits. This is a case the entire industry should watch closely, since the wrong precedent could blur the line between fair trades and intentional exploitation in ways that would introduce significant long-term risks.

Let’s dive into the news!

Phishing

Interview with the Chollima Part III, IV, V by Bitso Quetzal Team. The use of face altering AI tech is particularly concerning as well as the use of certain Latin American countries.
Are you a freelancer? North Korean spies may be using you.
A victim lost $1.25M to an address poisoning attack by Specter.

Scams

Malware

Blockchain malware’s neverending novelty by Taylor Monahan (Tay). A long history of malware using blockchains to retrieve secondary payloads.
SleepyDuck malware invades Cursor through Open VSX by John Tuckner (Secure Annex). Interestingly this malware sample uses Ethereum as a backup C2 command channel.
LeakyInjector and LeakyStealer Duo Hunts For Crypto and Browser History by Vlad Pasca, Radu-Emanuel Chiscariu (Hybrid Analysis).
Android Malware Mutes Alerts, Drains Crypto Wallets.

Media

How a Canadian math prodigy allegedly stole millions in crypto by CBC - The Current. The story of Andean Medjedovic. Interestingly, the podcast mentioned that Andean was caught in Europe at one point but was let go.
bountyhunt3rz - Episode 30 - mitchell amador.
Consensus Protocols by CBER Forum with Ertem Nusret Taş (a16z Crypto), Joachim Neu (a16z Crypto), Jacob Leshno (University of Chicago).
Crypto Market Wizards - Making $10M in DeFi with 0xlawlol. A particularly concerning interview with a greyhat on extorting protocols for post-hack bounty.

Contests

Onchain CTF Solution Writeup by kaden.eth.

Research

$1M Intercepted from the Balancer Hack by Bitfinding.
Supply Chain Attacks: Prepare for Next Week by Franco Riccobaldi (Coinspect).
Critical Security Risks associated with Telegram Trading Bots by Sebastian Lim (HashDit).
Securing $29 199 014 133 – Methodology to Secure One of the Biggest Project on Ethereum by Damian Rusinek (Composable Security).
Sticky Notes to Seed Phrases: How To Identify Crypto Artifacts in the Field by TRM.
Mastering Wake Printers for Solidity Security Analysis by Naoki Yoshida (Ackee).
LLM Vulnerabilities: Why AI Models Are the Next Big Attack Surface by Sai Krishna (Netlas).
What is the Solana Virtual Machine (SVM)? by 0xIchigo (Helius).
Move Vulnerability Database by MoveMaverick.
Sample Arkham Bounty onchain investigation of an Aaron Shames wallet by Whistleblower007. Ever though
Taming DeFi’s Ouroboros. A deep dive into quantifying recursive lending risk and why your “diversified” yield vault might be a ticking time bomb by totomanov.
DeFi’s Contagion Loop: The Cost of Hidden Dependencies by Chaos Labs.
ConneX: Automatically Resolving Transaction Opacity of Cross-Chain Bridges for Security Analysis.
FTSmartAudit: A Knowledge Distillation-Enhanced Framework for Automated Smart Contract Auditing Using Fine-Tuned LLMs.
Penetrating the Hostile: Detecting DeFi Protocol Exploits through Cross-Contract Analysis.
1 PoCo: Agentic Proof-of-Concept Exploit Generation for Smart Contracts.
SoK: Design, Vulnerabilities, and Security Measures of Cryptocurrency Wallets.
PoCo: Agentic Proof-of-Concept Exploit Generation for Smart Contracts.

Tools

Fuck blind signing: Introducing Web3 Semantic Second Factor by Bitfinding.
Unblind Second Factor is now available by Bitfinding.
Unblind your Safe Dashboard by Bitfinding.
Routescan Multichain Explorer. A unified explorer for 79 blockchains and a great way to track cross-chain transactions.

Hacks

Balancer, Beets Finance, Beethoven X

Date: November 03, 2025
Attack Vector: Rounding Error
Impact: $128,640,000
Chain: Ethereum, Arbitrum, Base, Polygon, Sonic, Optimism, Berachain

References:

https://x.com/peckshield/status/1985258403518992658
https://x.com/PeckShieldAlert/status/1985259843377308008
https://x.com/Phalcon_xyz/status/1985302779263643915
https://x.com/Phalcon_xyz/status/1985262010347696312
https://x.com/CertiKAlert/status/1987898759959699858
https://x.com/LefterisJP/status/1985300015548428789
https://x.com/The3D_/status/1985307154585203119
https://x.com/QuillAudits_AI/status/1985309997757317214
https://rekt.news/balancer-rekt2

Root Cause:

https://www.coinspect.com/blog/balancer-rate-manipulation-exploit/
https://blog.unvariant.io/balancer-hack-explained/
https://medium.com/coinmonks/balancer-hack-2025-f6273c36b81a
https://blocksecteam.medium.com/in-depth-analysis-the-balancer-v2-exploit-9552f6442437
https://slowmist.medium.com/when-small-flaws-collapse-a-giant-inside-balancers-100m-hack-85b9e92a9ae3
https://www.openzeppelin.com/news/understanding-the-balancer-v2-exploit
https://blog.trailofbits.com/2025/11/07/balancer-hack-analysis-and-guidance-for-the-defi-ecosystem/
https://www.certora.com/blog/breaking-down-the-balancer-hack
https://blog.weilinli.io/posts/balancer-attack-analysis
https://immunefi.com/blog/expert-insights/how-fragmented-security-enabled-balancer-exploit/
https://x.com/Balancer/status/1986104426667401241

Beets Finance

https://x.com/SonicLabs/status/1985401737096671549
https://x.com/beets_fi/status/1985281285816754179

Negotiations:

https://etherscan.io/tx/0xf462b894f3ac4d7883222f1db6aedddfb0402d51a71681da40427fe173231820

Incident Response Balancer:

https://x.com/Balancer/status/1986104426667401241

Incident Response Berachain (Chain Halt) ($12M):

https://x.com/berachain/status/1986952318068146323