Term Finance closes Meta Vaults after estimated $8.5M attack

Term Finance has permanently closed its Meta Vaults and removed their DAO governance powers after an attacker drained an estimated $8.5 million in ETH and stablecoins. Summary Term Finance has permanently blocked new deposits while keeping withdrawals available. PeckShield estimated that the attacker removed 2,843 ETH and 1.68 million USDC. Yearn said the exploit targeted Term’s custom governance wrapper, not standard Yearn V3 vaults. Term Labs has not confirmed depositor repayments, recovery amounts, or a compensation timeline. Term Finance permanently blocks Meta Vault deposits Term Labs said in an Aug. 23 update that it had shut down every Term Meta Vault and revoked the DAO governance roles connected to the products. The action cannot be reversed and prevents users from making new deposits, although existing depositors can continue submitting withdrawals. “All Term Meta Vaults were shut down and DAO governance roles have been revoked,” the development team said. Update: All Term Meta Vaults were shut down and dao governance roles have been revoked. This shutdown is irreversible and permanently prevents further deposits. Withdrawals remain open. Today's incident involved Term Vault governance. Based on our investigation so far, the… https://t.co/e1jstHfzWd — Term Labs (@term_labs) August 23, 2026 Term Labs did not disclose how much remained inside the vaults or how much each depositor could withdraw. Instead, the team said it would “explore pathways” to cover any gaps, leaving the final recovery amount and the treatment of any shortfall undecided. You might also like: Ethereum user loses 1,010 ETH in Tornado Cash phishing attack No compensation plan, reimbursement commitment, or payment schedule accompanied the update. The protocol also has not announced whether it has contacted the attacker, law enforcement agencies, centralized exchanges, or stablecoin issuers in an attempt to freeze or recover any assets. The closure followed Term Labs’ initial confirmation that a governance exploit had affected its vaults. As crypto.news reported on Aug. 23, the first statement did not identify the compromised contracts, pause status, or estimated loss because the investigation was still underway. At the time, Term Labs said: “We are aware of a governance exploit impacting Term vaults. We will share more details once it has been further investigated.” The latest notice settles the operational status of the Meta Vaults but leaves the financial accounting incomplete. Term Labs has not published a vault-by-vault breakdown, a final technical report, or a confirmed figure for missing customer assets. PeckShield traces ETH and stablecoin transfers Blockchain security firm PeckShield estimated the loss at approximately $8.5 million after tracing around 2,843 ETH and 1.68 million USDC from the affected vaults. The ETH was worth about $6.87 million when the transactions occurred. #PeckShieldAlert@term_labs was exploited for ~$8.5M due to a governance exploit impacting Term vaults.