Two Safe Wallets Lose $305K in FlashLoopAdapter Exploit

Two Safe wallets on Ethereum suffered a combined estimated net loss of 114.09 ETH, worth roughly $305,000, after a custom FlashLoopAdapter used to manage leveraged Aave V3 positions was exploited.

The attacker bypassed a Safe authentication check and then used a Morpho WETH flash loan to repay outstanding debt and release collateral. About 1,306 weETH was withdrawn from one of the wallets, but that figure represents the gross movement of collateral during the attack rather than the attacker’s final proceeds.

Defimon Alerts reported detecting the Ethereum exploit at 15:08:57 UTC on Thursday, October 1. SlowMist released its analysis the following day, identifying a vulnerability in the adapter’s opening and closing functions. According to the analysis, a malicious contract could impersonate a Safe and return the expected value, allowing it to pass a check designed to verify whether a legitimate wallet had enabled the FlashLoopAdapter.

The attacker-controlled contract also provided the adapter with the swap router and calldata. The router was directed toward a victim Safe, while the calldata instructed it to execute execTransactionFromModule. Since FlashLoopAdapter was already enabled on the affected Safe, the wallet treated the request as an authorized module transaction.

The exploit effectively transformed an authentication weakness into access to collateral controlled by the wallets. The incident highlights the importance of wallet permissions and transaction-execution paths in addition to the security of the underlying lending protocol. Similar authorization concerns are relevant to broader custody and wallet infrastructure.

To unwind the larger Safe’s leveraged position, the attacker took out a Morpho flash loan denominated in WETH and used it to repay approximately 1,335 WETH of Aave debt. The repayment released collateral backing the position, allowing roughly 1,306 weETH to be withdrawn. The second Safe lost approximately 6.4 weETH through the same vulnerable module.

Both affected Safes had the same single owner. After the borrowed funds were repaid and portions of the assets were converted, the attacker was left with approximately 114.09 ETH. Security reports valued those remaining proceeds at about $305,000.

The difference between the gross collateral movement and the realized loss is important. The approximately 1,306 weETH withdrawal was part of the process used to repay debt and unwind the leveraged position, rather than the amount ultimately stolen. The reported 114.09 ETH represents the net proceeds remaining after those transactions.

Aave Says Core Contracts Were Not Compromised

Aave founder and CEO Stani Kulechov said the affected component was an external integration and not an Aave V3 contract, adding that the incident had “zero effect on Aave v3.”

SlowMist classified the incident as a smart-contract vulnerability and identified the spoofable Safe authentication check as the mechanism that enabled the bypass. Defimon described FlashLoopAdapter as a Safe module designed to open and close leveraged Aave V3 positions and estimated the resulting loss at around $305,000.

FlashLoopAdapter is a custom contract built on top of Aave V3 for managing leveraged positions held by Safes that have enabled the module. Safe modules can execute transactions without requiring the standard owner transaction process for every operation, making them useful for automation but also giving authorized modules access to wallet-controlled assets.

In this case, the reported vulnerability was not the module permission itself. Instead, the issue involved the adapter’s caller-authentication and execution logic. The incident therefore represents a security failure at the integration layer rather than evidence that Aave V3’s lending pools were breached.

The primary report also references a separate Safe-wallet incident in September involving approximately 2,900 rsETH and weak authorization in an executor connected to an enabled module. That incident involved different contracts and a separate attack path.

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