# Avalanche Tranche Vault tied to Fence Finance and Valinor drained of 1.01M USDC in flash-loan exploit · pwn.watch

> On Oct 27 2026 (about 00:00 UTC Oct 28) an attacker drained 1,013,353.61 USDC from a Tranche Vault on Avalanche that Blockaid linked to Fence Finance and Valinor Digital. Blockaid said the attacker used a flash loan to mint inflated tranche shares and then redeemed the vault's remaining USDC across about two transactions; a later balance check showed no USDC left in the vault contract. The stolen funds were bridged to Solana. Neither Fence Finance nor Valinor Digital had published a statement, and whether the vault was paused or fixed was unconfirmed.

Page: https://pwn.watch/i/fence-finance-avalanche-tranche-vault-drain-oct-2026 · generated 2026-10-28T16:19:55.836Z

## Status
- Severity: medium · status: live · patch: no-fix-needed
- Product: Tranche Vault on Avalanche (Fence Finance / Valinor Digital)
- Started: 2026-10-27
- Affected: Tranche Vault contract 0xE25CB545Bdd47a8Ec2d08001cb5661B00D47621a on Avalanche

## Follow this incident
- RSS (one item per update): https://pwn.watch/i/fence-finance-avalanche-tranche-vault-drain-oct-2026/feed.xml
- JSON Feed: https://pwn.watch/i/fence-finance-avalanche-tranche-vault-drain-oct-2026/feed.json
- Full data (timeline, sources, posts, agentBrief): https://pwn.watch/i/fence-finance-avalanche-tranche-vault-drain-oct-2026.json
- This file: https://pwn.watch/i/fence-finance-avalanche-tranche-vault-drain-oct-2026/llms.txt

## Updates (newest first)
- 2026-10-28: On-chain checks show the vault holds no USDC; funds moved to Solana; Fence Finance and Valinor Digital have not commented. (https://thedefiant.io/news/hacks/tranche-vault-on-avalanche-drained-of-1-01-million-usdc)
- 2026-10-27: Attacker uses a flash loan to mint inflated tranche shares and redeems about 1.01M USDC from the vault in roughly two transactions; Blockaid flags it as an ongoing exploit. (https://x.com/blockaid_/status/2115249066787340562)

## Fix brief
# Security brief: Avalanche Tranche Vault tied to Fence Finance and Valinor drained of 1.01M USDC in flash-loan exploit

Source: https://pwn.watch/i/fence-finance-avalanche-tranche-vault-drain-oct-2026 · status: live · severity: medium · updated Oct 28, 2026, 13:20 UTC

## Patch status
**NO FIX NEEDED: no action on your side beyond verification.**

## What it is
On Oct 27 2026 (about 00:00 UTC Oct 28) an attacker drained 1,013,353.61 USDC from a Tranche Vault on Avalanche that Blockaid linked to Fence Finance and Valinor Digital. Blockaid said the attacker used a flash loan to mint inflated tranche shares and then redeemed the vault's remaining USDC across about two transactions; a later balance check showed no USDC left in the vault contract. The stolen funds were bridged to Solana. Neither Fence Finance nor Valinor Digital had published a statement, and whether the vault was paused or fixed was unconfirmed.

Severity detail: About 1.01M USDC taken from lenders in the vault, which was left with no USDC; no team statement yet

- Product: Tranche Vault on Avalanche (Fence Finance / Valinor Digital)

## Affected versions
- Tranche Vault contract 0xE25CB545Bdd47a8Ec2d08001cb5661B00D47621a on Avalanche

## Check whether you're affected
No generic command applies (the product is a hosted service, appliance or desktop app). Check the installed version in its admin UI / About screen and compare with the versions above.

## Fix
No fixed version is listed. Follow the vendor advisory below.

## Latest updates
- Oct 28, 2026: On-chain checks show the vault holds no USDC; funds moved to Solana; Fence Finance and Valinor Digital have not commented.
- Oct 27, 2026: Attacker uses a flash loan to mint inflated tranche shares and redeems about 1.01M USDC from the vault in roughly two transactions; Blockaid flags it as an ongoing exploit.

## Advisories
- [Blockaid alert: ongoing exploit on Tranche Vault related to Fence Finance and Valinor Digital](https://x.com/blockaid_/status/2115249066787340562) (Blockaid)

## Write-ups & news
- [Tranche Vault on Avalanche Drained of 1.01 Million USDC](https://thedefiant.io/news/hacks/tranche-vault-on-avalanche-drained-of-1-01-million-usdc)
- [Avalanche Vault Hack: $1.01M USDC Drained in Flash Loan Exploit Tied to Valinor and Fence](https://www.cryptotimes.io/2026/10/28/avalanche-vault-hack-1-01m-usdc-drained-in-flash-loan-exploit-tied-to-valinor-and-fence/)

## Caveats
Blockaid did not say how the vault relates to Fence Finance or Valinor Digital. Only depositors in this vault are affected; there is nothing for other users to patch.

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Machine-readable: https://pwn.watch/i/fence-finance-avalanche-tranche-vault-drain-oct-2026.json · all incidents: https://pwn.watch/incidents.json. Verify against the vendor advisory before changing production systems.