Bug puts $162 million up for grabs, says founder of DeFi platform Compound
We thought the carnage was over for popular decentralized finance, or DeFi, staking protocol Compound, but as it turns out, millions more than we thought are at risk. About $162 million is up for grabs after an upgrade gone very wrong, according to Robert Leshner, founder of Compound Labs.
The price of Compound’s native token, called comp, is down about 4.8%.
At first, the Compound chief tweeted Friday that there was a cap to how many comp tokens could be accidentally distributed, noting that “the impact is bounded, at worst, 280,000 comp tokens,” or about $92.6 million.
But on Sunday morning, Leshner revealed that the pool of cash that had already been emptied once had been replenished – exposing another 202,472.5 comp tokens to exploit, or roughly $66.9 million at its current price.
Some, including a core developer at DeFi platform Yearn, are billing this as the biggest-ever fund loss in a smart contract incident, but investors, for their part, don’t seem to care all that much.
“The crypto market shrugged off the largest-ever fund loss as if it was nothing,” said Mudit Gupta, a core developer at decentralized crypto exchange SushiSwap. “The future for DeFi is bright but we’re in uncharted territory, and there’s a lot to be learned still.”
What keeps going wrong
DeFi protocols such as Compound are designed to recreate traditional financial systems such as banks and exchanges using blockchains enriched with self-executing smart contracts.
On Wednesday, Compound rolled out what should have been a pretty standard upgrade. Soon after implementation, however, it was clear that something had gone seriously wrong, once users started to receive millions of dollars in comp tokens.
For example, $30 million worth of comp tokens were claimed in one transaction.
The saving grace of the entire debacle, however, was the fact that the pool of cash that was open to exploit – something called the Comptroller contract – had a finite amount of tokens. The problem is that this leaky pool got a fresh influx of cash, and 0.5 comp tokens are being added roughly every 15 seconds, according to Gupta.
“When the drip() function was called this morning, it sent the backlog (202,472.5, about two months of COMP since the last time the function was called) into the protocol for distribution to users,” Leshner wrote in a tweet Sunday morning.
Leshner noted that this brought the total comp at risk to 490,000 comp tokens, or about $162 million.
There are a few proposals to fix the bug, but Compound’s governance model is such that any changes to the protocol require a multiday voting window, and Gupta said it takes another week for the successful proposal to be executed.
In the meantime, this pool of cash is once again up for grabs for users who know how to exploit the bug.
Compound made clear that no supplied or borrowed funds were at risk, which is some consolation.
“No user funds are or were at risk so it’s not that big of a deal,” said Gupta. “Everyone kinda got diluted but didn’t lose anything directly.”
There are also some white hats in the community.
After the Compound founder begged users to voluntarily return the platform’s crypto tokens, some did. Leshner said that as of Sunday morning, about 117,000 comp tokens, or $38.7 million, had been returned.
But as Mati Greenspan, portfolio manager and Quantum Economics founder, points out, how things play out with this bug is almost entirely beside the point. “The bigger issue is — can it happen again?” he said.
Compound is the world’s fifth-largest DeFi protocol with a total value locked of $10.3 billion, according to DeFi Llama, which provides ranking and metrics for DeFi protocols.
Greenspan said the protocol can easily absorb this loss and a lot of it will likely be returned, “but the larger issue would be if people lose confidence in the system’s ability to function properly.”
Gupta said one immediate problem is that the Comptroller account has given away comp tokens that were reserved for future rewards.
You can think of Comptroller as the heart of Compound, Gupta explained. It facilitates all core features like borrowing, lending, and rewarding.
Comptroller oversees the pool of cash used to pay rewards to users who provide their crypto to borrowers at a set interest rate, which is typically a single-digit APY.
“Future rewards might have to be reduced to make Comptroller solvent,” said Gupta.
The logo of multinational tech company Foxconn (also known as Hon Hai), which is a major manufacturer for Apple products, in Taipei, Taiwan, on April 16, 2025.
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Foxconn, a key Nvidia partner in its artificial intelligence buildout, saw its revenue spike 26% year-on-year in November, as demand for servers continued to ramp up amid the AI boom.
The Taiwanese company, also known as Hon Hai, is the world’s largest contract electronics manufacturer and makes the servers that hold chips in data centers, as well as assembling Apple’s iPhone.
Foxconn on Friday reported “strong growth” year-on-year for its cloud and networking products, pointing to “momentum for AI server racks,” in its monthly revenue report. It reported revenue of NT$844.3 billion ($27 billion) for November.
A longstanding partner to many of the world’s largest tech companies including Nvidia and Apple, Foxconn has become a key player in the rollout of AI infrastructure in recent times.
It was announced in May that the company would provide infrastructure to a major AI factory in Taiwan, in collaboration with Nvidia and the Taiwanese government. Two months later Foxconn announced it was taking a stake in data center construction company TECO Electric & Machinery Co.
OpenAI said last month that it would collaborate with the Taiwanese company on design work and U.S. manufacturing readiness for next generation AI infrastructure hardware.
Foxconn’s month-on-month revenue was down around 6%, with the company pointing to its smart consumer electronics segment slightly declining.
“AI server rack shipments continue to ramp up, and ICT products are in peak season in the second half of the year,” the monthly report said in its business outlook for the fourth quarter.
The company said in November that growth in its AI server business had seen its third-quarter profits jump 17% year-on-year.
Foxconn’s share price has jumped 26% since the start of 2025, following a 76% uptick over the previous 12 months.
Yi He, co-founder of Binance, in Dubai, United Arab Emirates, on May 10, 2023.
Bloomberg | Bloomberg | Getty Images
Binance Holdings, the world’s largest cryptocurrency exchange, named a new co-CEO Wednesday in a major shake-up of its leadership structure.
Yi He, who co-founded Binance with former head Changpeng Zhao in 2017 and has children with the crypto mogul, will now split duties with acting CEO Richard Teng, who announced the news this week.
The move represents the firm’s most significant leadership change since Teng succeeded Zhao, who pleaded guilty to violating U.S. money-laundering laws in 2023.
Teng, who was appointed amid intense regulatory scrutiny of Binance and crypto more broadly, notably had a background in financial regulation and services, formerly holding a senior regulatory role at Singapore’s central bank.
“[Yi He] has been there from the start, and she has been driving a lot of changes and driving the growth of Binance,” Teng told CNBC’s Dan Murphy on Wednesday shortly after the announcement.
Yi He’s elevation to the co-CEO position represents the appointment of an insider with longstanding ties to Zhao, also known as CZ.
The move comes after U.S. President Donald Trump pardoned CZ, who had previously pleaded guilty to enabling money laundering while heading the cryptocurrency exchange.
The Trump administration has taken a friendlier stance toward the crypto industry, with several high-profile cases dropped in recent months.
Queen behind the scenes
Yi He has maintained a relatively low public profile compared to CZ, with many details regarding her roles and activities at Binance unclear.
Her social profiles list her most recent position as Chief Customer Service Officer at the crypto exchange.
One of the last major public statements from the businesswoman was in defense of CZ during his 2024 trial, among 161 letters requesting leniency from the court.
In her letter written in Chinese, Yi He identified herself as CZ’s business partner and “the mother of his three children.”
She claimed that she met CZ at a public blockchain event in 2014, three years before Binance was founded. She was then working at cryptocurrency exchange OKCoin and recruited CZ to join her.
“As CZ’s life partner, I’ve known him for nearly ten years, so I understand a side of him that’s often overlooked,” she wrote in the 2024 letter defending him.
Binance said in a statement Wednesday that Yi He has “played a fundamental role in shaping Binance’s vision and culture, guiding a strategy focused on users’ needs and innovation.”
The company also included a public statement from Yi He, in which she emphasized her and Teng’s “complementary perspectives and shared vision.”
“Together, we bring diverse perspectives and are confident in leading the future of the industry during this pivotal time, as we responsibly expand our global presence and drive sustainable innovation with our users always at the center,” she said.
Federal probes into Binance have also referenced her role in the company. In 2020, U.S. prosecutors reportedly sought records of communications involving Yi He and other executives related to anti-money laundering compliance and the creation of Binance’s U.S. entity.
Media reports have previously painted Yi He as a “Crypto Queen” wielding massive sway behind the scenes at Binance.
According to a report from the Wall Street Journal in 2023, Yi He was a former Chinese talk-show host before joining OKCoin, and she entered a relationship with CZ while working together in Shanghai.
The report added that He would assume sweeping control over the crypto giant’s marketing and investment divisions.
Binance and Yi He did not immediately respond to CNBC’s request for comment.
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