Approximately $40M in funds trapped in Morpho lending markets due to exploited or depegged collateral assets.
Security & Exploits ·
Approximately $40 million in funds are currently trapped across Morpho lending markets, according to reports that point to collateral assets that have either been exploited or lost peg. The affected assets include AVLT, AZND, and msY, which serve as backing for positions within the protocol's lending infrastructure. The mechanism by which these assets became problematic—whether through smart contract vulnerabilities, market devaluation, or other failure modes—remains unclear from available information, as does the timeline for potential recovery or liquidation of the trapped capital.