In March 2023 an attacker took about 197 million dollars from the Euler Finance lending protocol using a complex attack that leveraged flash loans. Over the following weeks the attacker returned most of it. The case shows both how fast a flaw can be exploited and how recovery sometimes works.
What the source says
Coverage in The Block, dated 13 March 2023 for the attack, describes a stolen total of 197 million dollars in crypto assets and a complex attack that leveraged flash loans. The same outlet later reported the final returns: 31 million dollars in three transactions, made up of 10,580 ETH and 12 million dollars in DAI.
The total returned passed 177 million dollars. The article says this covers the expected recoverable funds once the bounty the project had offered is taken into account, and that Euler Labs stated all recoverable funds had been returned.
What a flash loan is
A flash loan is an uncollateralized loan that must be repaid inside the same transaction. If it is not repaid, the whole transaction reverts as if it never happened. The Ethereum security guide explains the security issue: an attacker can borrow a large sum for one transaction to skew prices or amass voting power, then act on the distortion before repaying.
Flash loans are not the bug. They are a way of getting temporary capital, which lowers the cost of exploiting a bug that already exists.
What we cannot say
Several write ups discuss the specific vulnerable function and a possible link to an earlier bug fix. We did not confirm those technical details from a primary source for this post, so we leave them out. If you need the exact mechanism, read the project's own post mortem.
Lessons that hold regardless
- Assume attackers can borrow unlimited capital for one transaction when you model threats.
- A change that fixes one bug can open another, so give every fix the same review and testing as new features.
- Pre agreed contact channels and bounty offers can matter in the hours after an incident.
- Monitoring with offchain alerts helps a team respond quickly, as the Ethereum security guide notes.
Quick check
Did the attacker keep any of the funds?
The Block reported that the returned amount covered the recoverable funds after the bounty adjustment, so a portion was treated as the agreed reward.
Is a flash loan always an attack?
No. It is a normal mechanism. It matters for security because it removes the capital barrier for attacks.
Sources
Last reviewed: 19 October 2026.
