Aave wasn’t hacked. Why did its users face restrictions?

A Binance-linked attacker borrowed from Aave before emergency controls took effect. The response stopped new deposits as lenders withdrew, pushed up borrowing costs and reopened a debate over how much disruption emergency safeguards should impose on other users. Summary A wallet linked to the Binance attacker deposited 60 million USDT into Aave and borrowed 19,762 WETH, worth approximately $44.6 million, before emergency restrictions took effect. Aave’s guardians froze new deposits and borrowing across 175 V3 reserves and 117 V4 reserves, while withdrawals, repayments and liquidations remained available. Aave announced on October 30 that all V3 and V4 markets had reopened, stating that its contracts were unaffected and existing positions remained fully collateralised. Risk stewards removed approximately $3.83 billion in unused borrowing capacity to limit the size of new positions that could be opened when markets resumed. Nine assets, including USDT and USDC, remained unable to provide new borrowing power as collateral, although users could still supply, withdraw, borrow and repay them under the remaining market rules. Aave has reopened its V3 and V4 lending markets after emergency...