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The Euler Finance attack remains one of the most technically sophisticated exploits in the history of DeFi. Hackers abused flash-loan–powered recursive borrowing loops, artificially manipulated collateral ratios, and drained more than $200M in assets from the lending protocol.
This case study demonstrates how AnChain.AI’s Agentic AI stack—including :
that transforms a complex, smart contract exploit into a clear, actionable investigation workflow for compliance, security, and law-enforcement teams.
Euler Finance’s smart-contract vulnerability enabled attackers to:
This style of exploit creates thousands of noisy, intertwined transactions—impossible to manually analyze at investigative speed.
Using Our Auto Trace AI, investigators immediately surface the 80% workload within one minute:
The model automatically expands relevant paths, deduplicates hops, and prunes false positives.
Outcome: Sub-minute understanding of how the exploit was executed technically and financially.
Recursive borrowing is notoriously difficult to follow due to internal contract calls.
AutoTrace AI + MCP Server reconstruct:
Outcome: A forensic, time-sequenced map of the exploit mechanics.
With the Agentic AML API, investigators can automatically detect:
Outcome: Separate the attacker cluster from noise, even when wallets attempt obfuscation.
All addresses interacting with known exploit flows are automatically screened:
Outcome: Exchanges, market makers, DAOs, and law enforcement get immediate alerts on contaminated flows.
🏛️ Law Enforcement & Regulators – Leverage AI-driven tracing and entity clustering for seizure, prosecution, and evidence preservation.
🪙 DeFi Protocols & DAOs – Monitor smart contract exploits, flash-loan attacks, and protocol vulnerabilities with real-time tracing.
🏦 Crypto Exchanges & Market Makers – Track stolen funds across chains and flag compromised wallets interacting with your platform.
🧾 Blockchain Forensics & Investigators – Reconstruct exploit timelines, identify attacker clusters, and generate case-ready intelligence reports.
💼 Risk & Compliance Teams – Proactively detect anomalies, cross-chain laundering, and mixer usage linked to known exploit addresses.
The Euler exploit involved recursive borrowing, flash-loan liquidity cycling, cross-chain laundering, and rapid obfuscation.
With traditional tools, analyzing such an attack can take weeks.
With AnChain.AI:
Schedule your investigation walkthrough today:
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