Aurum Advised a DeFi Protocol on a $40 Million Institutional OTC Transaction Following a Major Security Incident – Case Study

Overview

Aurum advised a DeFi protocol on the legal structuring and execution of a high-value institutional OTC transaction involving the transfer of assets and legal rights representing over 21,000 ETH.

The transaction formed part of a broader strategic response following a security incident affecting a third-party protocol. Its successful execution was an important element in protecting stakeholders, restoring market confidence and supporting the continued stability of the participating ecosystems.

From engagement to signing and completion, the transaction was successfully concluded in less than 48 hours.

The Challenge

The transaction involved substantial commercial exposure, multiple institutional participants and unusually compressed timelines.

Although blockchain transactions often rely on smart contracts or other technical settlement mechanisms, the commercial realities of this transaction required a different approach. The structure needed to accommodate sensitive commercial considerations, coordinated execution by multiple parties and carefully managed completion mechanics that could not practically be addressed through purely on-chain automation.

As a result, the transaction depended primarily on robust contractual protections, carefully designed legal procedures and coordinated execution.

Our Role

Aurum acted as lead legal counsel to the DeFi protocol throughout the transaction.

Our work included:

• reviewing and negotiating the principal transaction documentation prepared by the counterparty;
• negotiating key commercial provisions, including representations, warranties, liability allocation and risk protections;
• conducting legal and commercial due diligence on the counterparty while coordinating reciprocal diligence requirements;
• analysing multiple settlement structures and advising on the most appropriate completion methodology;
• designing detailed closing mechanics, including completion conditions and fallback mechanisms should any step fail to occur as intended;
• coordinating execution across all participants to ensure completion within the required timeframe.

Given the compressed timetable, legal workstreams, negotiations, diligence and transaction management proceeded simultaneously, requiring continuous coordination between legal advisers, operational teams and decision-makers on both sides.

The Outcome

The transaction successfully completed within two days of instruction, allowing the parties to proceed with the coordinated public announcement on schedule.

The agreed legal framework provided clear contractual protections, appropriately allocated transaction risk and established completion mechanics designed to preserve execution certainty despite the compressed timeline and operational complexity.

By combining sophisticated transaction structuring with practical understanding of blockchain operations, Aurum enabled the parties to execute a mission-critical institutional transaction under significant time pressure while safeguarding the client’s commercial position.