Term Labs said all fixed-rate loan positions in the affected vaults were restored on August 25 following a security incident that impacted liquid balances within Term vaults. The company said Term V1 and V2 contracts were not compromised, and its direct lending market remains open. The attack began between August 17 and 18, when an attacker funded an operational wallet through Tornado Cash and submitted a malicious proposal disguised as a governance proposal. The proposal set the governance delay parameter to zero and removed the window period for LPs to block changes. On August 23, the attacker executed two batches of attacks, extracting assets from ETH and USDC strategies and transferring them to the attacker's wallet. Term Labs said it is cooperating with law enforcement, while the affected meta-vaults and strategies have been shut down. The firm added that the contracts were upgraded and migrated before maturity.