There was a recent attack on CRV that ultimately failed.
1) Attackers took out massive loans for CRV.
2) Attackers sold off the CRV to crash the price, so that those with loans for CRV: either long positions or collateral for backed loans, would get liquidated.
3) Attackers did not have enough CRV to sell, so the price did not go low enough, and then buyers bought up the tokens triggering a short squeeze, eventually the attacker got liquidated and lost all their collateral, which market bought the price of CRV to high prices. Even the CRV lenders/platform lost money since there wasnt enough CRV for sale, to market buy back the tokens.
The recent attack on CRV did not succeed because the attacker did not have enough CRV to crash the price quickly enough below the liquidation levels for those with margin loans. Due to this lack of funds by the sellers. The buyers were able to simply buy up all the tokens they sold and then short squeeze the price, causing the attacker themself to get margin called and liquidated.
Source: for CRV attack: https://decrypt.co/115596/aave-feeling-the-squeeze-even-after-failed-attempt-by-mango-hacker
However the same attack was done successfully on BCH. This attack was likely done by exchanges who can see their users' margin loans, collateral and liquidation prices. Exchanges also can operate on fractional reserves and can sell more crypto than they actually have. So for them money wasn't an issue.
Due to this shorting method, all BCH margin long positions and BCH collateral for loans were margin called and wiped out.
Example 1: there was no BCH on FTX when they finally revealed their balance sheet. We also do not know how short they were on BCH with user funds, it could be hundreds of thousands, or millions of BCH short that they “owe” but will never rebuy since they declared bankruptcy. Selling BCH was profitable to them, but they wasted this money on other stuff such as embezzlement.
Source: FTX balance sheet: https://d1e00ek4ebabms.cloudfront.net/production/7ab64a3b-6ce0-47cc-96ac-5e2d2a8c5d6c.png
FTX Trading volume chart: https://cryptowat.ch/charts/FTX:BCH-USD
Example 2: Genesis was borrowing BCH through their company and their EARN product on Gemini, then selling off the BCH likely on FTX and giving the USD as a loan to Grayscale who then purchased GBTC with this money. Selling their borrowed BCH was profitable to them, however they lost their funds on FTX and also spent the profits from this trade by gambling on GBTC, which is down over 50% from their purchases resulting in over $450M USD in losses. Instead of rebuying BCH to repay their borrowers, they have chosen to just keep everyone's money until they feel like it and hope their gamble on GBTC profits.
Source: https://old.reddit.com/r/btc/comments/z3647z/since_jan_2021_digital_currency_group_has_spent/
Example 3: is that Binance published liabilities for 452K BCH but had only 112K BCH in their wallet. When confronted by this, they deleted their liabilities and also deleted their pegged tokens to match one of their other cold storage addresses.
They can lie about their liabilities because they are not audited by anyone. They clearly were caught with unbacked 1:1 pegged tokens , and therefore deleted the pegged tokens, which is an admission of guilt. Also how do they just transfer their supposed “reserves” wallet address to another with 0 transactions? Which wallet was the reserve? What is the other wallet and why was it the supposed reserve before the switch?
Source:
Binance 452K liabilities with 112K BCH cold storage: https://old.reddit.com/r/btc/comments/yrhvvt/binance_just_admitted_that_they_owe_611919_bch_to/
Binance deletes liabilities and also deletes pegged tokens to match a different cold wallet than before: https://old.reddit.com/r/btc/comments/z1kxmr/in_response_to_criticism_regarding_unbacked_bch/
Example 4: Coinflex is from the other side of these trades, they actually were an exchange which took massive long positions with their customer funds (non consensual & embezzlement/fractional reserves) and got margin called when all the major exchanges sold BCH short. They were a small exchange which got destroyed by the big ones. These types of massive leveraged long positions actually provide incentives to short BCH and get these positions margin called.
Source: https://www.coindesk.com/business/2022/09/26/coinflexs-creditors-to-own-65-of-firm-after-reorganization/
The only way to stop this attack on BCH is the same way it was prevented on other coins.
A) When the attackers/shorters dump to cause margin calls, their sells need to be bought up, and the price needs to rise to get the attackers themselves margin called.
B) Of course another option is not to use margin and provide incentives for this type of extreme price manipulation.
Unfortunately as we saw with BCH the attackers were extremely large institutions with more money and paper BCH than the BCH community could deal with, so their attacks have been successful until now.