Venus Protocol suffers $2.15M bad debt after THE and CAKE liquidation tied to Tornado Cash-funded address

Venus Protocol incurred approximately $2.15 million in bad debt on March 15 following liquidations of THE and CAKE positions allegedly orchestrated by an address that had received 7,400 ETH from Tornado Cash, onchain analyst Yujin cited by BlockBeats reports. The address borrowed roughly $5.07 million in assets from Venus—including 2,172 BNB, 1.516 million CAKE and 20 BTC—and had earlier routed 7,400 ETH via 0x7a7…234 to secure about $9.92 million in stablecoins (USDT, DAI, USDC) on Aave, which were then distributed across multiple wallets to purchase THE. Around 20:00, the address allegedly inflated THE's price on a CEX, deposited 36.1 million THE as collateral on Venus to borrow BTC, BNB and CAKE, then approximately 40 minutes later THE's price collapsed, triggering forced liquidations and leaving Venus with roughly $2.15 million in unpaid loans. Yujin noted that while the address started with $9.92 million borrowed and only about $5.07 million lent onchain—suggesting no direct onchain profit—it likely profited from a short position on the CEX by driving down THE's price through the onchain liquidations.