SiloFinance, a non-custodial lending protocol, suffered a sophisticated hack on June 25, 2025, resulting in a loss of approximately $545,000. Security platforms like PeckShield and CertiK detected the breach and called the protocol’s attention via X.
$545K Vanishes
The attack targeted a recently deployed SiloFinance contract, exploiting a flaw in the “openLeveragePosition” function, which allowed user-controlled inputs to manipulate the system. The hacker, using an address funded by Tornado Cash, a sanctioned crypto mixer, executed a series of transactions to siphon funds.
Report reveals that the exploit drained $545,000, primarily in cryptocurrencies held within the protocol’s isolated money markets. Security firm Cyvers noted the vulnerability stemmed from improper validation, enabling the attacker to bypass safeguards and extract funds. This loss, although significant, is relatively contained compared to Silo’s total value locked. However, it exposes weaknesses in the protocol’s code despite prior audits.
SiloFinance Reassures Stakeholders
In response to the recent incident, SiloFinance took to its X handle to reassure stakeholders that its Core contracts are secure and that all markets and vaults remain intact. The firm explains that the exploit involved an audited contract associated with a peripheral feature that is not yet released.
It adds that no user funds were impacted, however, Silo DAO’s funds, which were deployed for testing the leverage feature, were affected. The user interface routers have reportedly been reactivated, and the protocol is fully operational.
In recent times, the DeFi space has faced a wave of attacks, including Loopscale’s $5.7 million loss in April 2025. As the dust settles, a curious detail emerges: the hacker’s use of Tornado Cash suggests a deliberate attempt to obscure their tracks, a tactic seen in high-profile hacks, such as Penpie’s $27 million hack in September 2024.
This raises questions about whether the attacker is a seasoned cybercriminal or part of a larger network targeting DeFi. Silo Finance now faces the challenge of restoring trust while the crypto community watches closely, hoping for stronger defenses to protect the future of decentralized lending.
