DeFi lending protocol Euler Finance released the latest progress update on Twitter, saying that it has prevented direct attacks by helping to disable the EToken module, and is working with TRM Labs, Chainalysis and the broader Ethereum security community to help investigate and recover funds. The team has also notified US and UK law enforcement agencies and shared information, and has tried to contact those responsible for the attack.

In addition, Euler Finance stated that the attacker exploited vulnerable code, allowing it to create unsecured token debt positions by donating funds to the protocol's reserve, allowing the attacker to liquidate these accounts and profit from liquidation bonuses. Previously, Euler Labs had worked with various security organizations to audit the Euler Finance protocol. Although the vulnerable code was reviewed and approved during the external audit, the vulnerability was not discovered as part of the audit, and the vulnerability remained on the chain for eight months until it was exploited today, despite a $1 million bug bounty during that time.