Definition ∞ A fund drain is an event where cryptocurrency assets are illicitly removed from a smart contract, wallet, or protocol. This typically occurs through exploitation of a security flaw or by gaining unauthorized control over the associated private keys. The result is a depletion of the targeted assets, often with significant financial repercussions for stakeholders.
Context ∞ Fund drains are a recurring and significant concern in the digital asset space, frequently reported as major security incidents affecting decentralized finance protocols and exchanges. The analysis of these events often focuses on the specific vulnerabilities exploited, such as reentrancy attacks or compromised administrative controls. Ongoing efforts aim to bolster smart contract auditing and secure key management practices to prevent future occurrences.
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