Whale Loses ~$38M After 1-of-1 Multisig Key Compromised; Attacker Controls Aave Position
A crypto whale lost roughly $38 million after an attacker gained control of a multisig wallet that was effectively a 1-of-1 signer. Early on-chain reports pegged initial losses at about $27.3M; subsequent tracking of associated wallets and leveraged positions raised the total to ~ $38M. The attacker moved about 4,100 ETH (~$12.6M) through Tornado Cash to obfuscate funds and left roughly $2M liquid. Critically, the attacker still controls the victim address, which holds a large leveraged Aave long: ~25,000 ETH supplied as collateral against over $12M in borrowed DAI. On-chain timestamps show the multisig was created and ownership transferred to an attacker-controlled key within minutes, suggesting the private key was leaked during setup or the multisig was maliciously created for the victim. Analysts warn this is part of a wider pattern of private-key theft and social-engineering attacks that target human trust rather than smart-contract bugs. Traders should note immediate liquidation risk for the Aave position and elevated market risk from on-chain movement of large collateral. Recommended defensive measures: use hardware/cold signers, set up true multisig with multiple independent signers, isolate signing devices, verify transactions off-UI, and avoid third-party setup assistance. Primary keywords: multisig exploit, private key compromise, Tornado Cash, Aave, wallet security. Secondary keywords: social engineering, leveraged position, on-chain tracking.
Bearish
The news is bearish for the affected asset (ETH) in the short term because a large on-chain collateral position (~25,000 ETH) controlled by an attacker creates immediate liquidation and selling pressure risk. The attacker already moved ~4,100 ETH through Tornado Cash and retains control of the collateralized address, increasing probability of further on-chain movement or forced liquidation. Large, opaque transfers typically raise volatility and can trigger margin calls or stop-outs nearby. In the medium term the impact is likely limited: this is a security/operational incident targeting an individual whale rather than a protocol failure, so broader confidence in Aave or ETH fundamentals may recover after liquidations and forensic tracing. However, repeated private-key/social-engineering incidents can weigh on sentiment for custodial/misconfigured multisig setups and increase cautious behavior among traders, possibly reducing leverage use and liquidity in the short-to-medium term.