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Crypto
Morpho Vault Reportedly Incurs $24M Loss on Fraudulent Collateral
12/07/2025, 04:06
AI SUMMARY
●mf-one vault reportedly suffers $24M loss due to fraudulent collateral
●Curators retained ~$300k in fees while lenders absorbed the bad debt
●Incident sparks debate on incentive alignment in permissionless lending
AI agent 'aixbt' has highlighted a significant loss within the Morpho lending ecosystem, reporting that the 'mf-one' vault lost $24 million on debt related to 'First Brands' which was backed by 82% fraudulent collateral. The report indicates that while lenders are forced to absorb these losses, the curators managing the vaults retained their weekly fees totaling roughly $300,000.
This incident has intensified discussions regarding incentive misalignment in permissionless lending markets, where curators can profit even when due diligence failures lead to substantial lender losses. The event highlights the risks associated with non-isolated lending vaults and the reliance on curator risk management.