{"investigation":{"slug":"florence-finance","entity_name":"Florence Finance","trust_score":28,"severity_base":null,"score_modifier":0,"confidence":0.72,"status":"published","content_type":"investigation","summary":"Florence Finance is a DeFi real-world asset (RWA) lending protocol built on Arbitrum that tokenizes euro-denominated loans to European small and medium enterprises (SMEs). In November 2023 the protocol lost $1.45 million in USDC to an address poisoning attack, and notably failed to publicly acknowledge the theft for at least five days after it was reported by security firms. As of 2025-2026 the protocol's TVL has collapsed to approximately zero and the official website indicates the project is shutting down.","sections":[{"content":"Florence Finance is a decentralized finance protocol founded in early 2021 that focuses on real-world asset (RWA) lending. The platform enables users to deposit USDC or euro-denominated stablecoins into on-chain vaults that fund loans to European SMEs through partnered lending platforms. The protocol operates natively on the Arbitrum network following a migration from Ethereum. The native governance and utility token is Florence Finance Medici (FFM), launched in early 2024 on Arbitrum with a total supply of one billion tokens. The founding team is led by Chiel Ruiter, a former Managing Director at Goldman Sachs, UBS, and Credit Suisse, who transitioned to crypto in 2021. The project received an Arbitrum Short-Term Incentive Program (STIP) grant proposal for 250,000 ARB to incentivize new depositors. The protocol also expanded to the Base network in September 2024, opening the Avellinia Loan Vault. By 2025-2026, according to DeFiLlama, TVL had declined to approximately zero and the official website indicates the project is shutting down.","heading":"Protocol Overview","sources":[{"url":"https://medium.com/coinmonks/navigating-new-financial-horizons-chiel-ruiter-on-bridging-defi-with-real-world-assets-088faed692c5","name":"medium.com","type":"other","credibility":3},{"url":"https://defillama.com/protocol/florence-finance","name":"defillama.com","type":"other","credibility":3},{"url":"https://medium.com/florencefinance/florence-finance-is-now-live-on-base-5b1b7b08bd40","name":"medium.com","type":"other","credibility":3},{"url":"https://forum.arbitrum.foundation/t/florence-finance-final-stip-round-1/17103","name":"forum.arbitrum.foundation","type":"other","credibility":3},{"url":"https://www.florence.finance/","name":"florence.finance","type":"other","credibility":3}],"severity":"medium"},{"content":"On November 28, 2023, Florence Finance lost approximately 1,456,162 USDC (roughly $1.45 million) in an address poisoning attack on Ethereum. Address poisoning is a phishing technique in which an attacker generates a wallet address visually resembling a legitimate address the victim has previously used; when the victim copies an address from their transaction history they may select the attacker-controlled lookalike address instead. According to web3 security platform Cyvers, which detected the breach and reported it to BeInCrypto, the attacker sent funds through intermediary addresses before converting them to Ethereum and bridging the proceeds to THORChain, making recovery substantially harder. Blockchain security firm PeckShield publicly reported the incident on November 30, 2023. Research group ScamSniffer noted the same attacker had stolen at least $5 million from at least 21 victims across a four-month period. A critical transparency concern is that Florence Finance did not post any public acknowledgment of the theft on X (formerly Twitter) or other official channels for at least five days after the attack was first reported by third-party security researchers. Cyvers stated they were working with Florence Finance to strengthen security protocols following the incident.","heading":"Address Poisoning Attack — $1.45 Million Loss (November 2023)","sources":[{"url":"https://beincrypto.com/florence-finance-loses-1-45-million-hackers/","name":"beincrypto.com","type":"other","credibility":3},{"url":"https://www.web3isgoinggreat.com/single/florence-finance-theft","name":"web3isgoinggreat.com","type":"other","credibility":3},{"url":"https://biztoc.com/x/2bc060bbf545f3ed","name":"biztoc.com","type":"other","credibility":3}],"severity":"medium"},{"content":"Following the November 2023 address poisoning attack, Florence Finance failed to issue any public statement on X (formerly Twitter) or other community channels for at least five days after the theft was reported. This absence of communication raises transparency concerns for a protocol that manages user deposits. The BeInCrypto investigation noted that as of December 4, 2023 — approximately six days after the attack occurred — Florence Finance had still not informed its community. Protocols handling user funds are broadly expected to disclose material security incidents promptly. The delayed and initially absent response may have exposed users who remained active on the platform to continued risk without adequate warning.","heading":"Transparency and Incident Response Concerns","sources":[{"url":"https://beincrypto.com/florence-finance-loses-1-45-million-hackers/","name":"beincrypto.com","type":"other","credibility":3},{"url":"https://www.web3isgoinggreat.com/single/florence-finance-theft","name":"web3isgoinggreat.com","type":"other","credibility":3}],"severity":"medium"},{"content":"According to DeFiLlama, Florence Finance's TVL has declined to approximately zero as of 2025-2026, with only minimal residual active loan balances of approximately $61,976 remaining. The official Florence Finance website indicates the project is shutting down. The FFM token, launched in January 2024 with a public sale that reportedly sold out in under ten seconds, trades with negligible volume and a market cap substantially below its implied launch valuation. The Arbitrum and Base deployments appear effectively inactive. No official post-mortem or wind-down announcement explaining the circumstances of the closure has been publicly documented in major crypto news outlets as of May 2026.","heading":"Protocol Decline and Shutdown","sources":[{"url":"https://defillama.com/protocol/florence-finance","name":"defillama.com","type":"other","credibility":3},{"url":"https://www.florence.finance/","name":"florence.finance","type":"other","credibility":3},{"url":"https://coinmarketcap.com/currencies/florence-finance-medici/","name":"coinmarketcap.com","type":"other","credibility":3}],"severity":"medium"},{"content":"As an RWA lending protocol, Florence Finance carries inherent structural risks beyond typical DeFi smart contract exposure. The protocol relies on centralized counterparties — namely SME lending platforms and their underlying borrowers — to administer and repay loans. If any key participant becomes insolvent, enforcing claims over real-world collateral may be legally complex. The protocol's euro-denominated loan exposure also introduces foreign exchange risk for USDC-denominated depositors. The protocol operated without publicly disclosed audit reports being prominently featured in its documentation, and the STIP grant process surfaced at least one community concern about whether the protocol had a fully live and tested product at the time of its grant application, which Florence Finance disputed by providing on-chain data.","heading":"RWA Structural and Counterparty Risks","sources":[{"url":"https://forum.arbitrum.foundation/t/florence-finance-final-stip-round-1/17103","name":"forum.arbitrum.foundation","type":"other","credibility":3},{"url":"https://docs.florence.finance/docs","name":"docs.florence.finance","type":"other","credibility":3}],"severity":"medium"}],"timeline":[{"date":"2021","event":"Florence Finance founded by Chiel Ruiter and co-founders during the COVID pandemic, conceived as a euro-denominated RWA protocol for DeFi.","source":"","date_original":"2021-01-01"},{"date":"2022","event":"Protocol Version 2 launched; first loan underwritten on Ethereum mainnet.","source":"","date_original":"2022-01-01"},{"date":"2023","event":"Protocol migrates to Arbitrum network.","source":"","date_original":"2023-01-01"},{"date":"2023-10","event":"Florence Finance submits STIP Round 1 grant proposal to Arbitrum DAO requesting 250,000 ARB to incentivize new depositors.","source":"","date_original":"2023-10-01"},{"date":"2023-11-28","event":"Address poisoning attack drains 1,456,162 USDC (~$1.45 million) from the protocol on Ethereum. Attacker converts funds to ETH and bridges via THORChain.","source":""},{"date":"2023-11-30","event":"Blockchain security firm PeckShield publicly reports the Florence Finance address poisoning attack.","source":""},{"date":"2023-12-04","event":"As of this date, Florence Finance has still not publicly acknowledged the $1.45 million theft on any official channel.","source":""},{"date":"2024","event":"FFM public token sale launches; reportedly sells out in under 10 seconds with 104 participants averaging 4.27 ETH each.","source":"","date_original":"2024-01-01"},{"date":"2024-03","event":"Florence V3 released on Arbitrum, introducing 'yield stacking' using stEUR alongside Florence vaults.","source":"","date_original":"2024-03-01"},{"date":"2024-09","event":"Florence Finance launches on Base network, opening the Avellinia Loan Vault.","source":"","date_original":"2024-09-01"},{"date":"2025","event":"TVL begins sustained decline toward zero; protocol activity diminishes substantially across Arbitrum and Base.","source":"","date_original":"2025-01-01"},{"date":"2026","event":"Official Florence Finance website announces protocol shutdown. DeFiLlama records $0 TVL with only ~$61,976 in residual active loans.","source":"","date_original":"2026-01-01"}],"sources_used":[{"url":"https://www.web3isgoinggreat.com/single/florence-finance-theft","name":"Florence Finance loses $1.45 million to address poisoning — Web3 Is Going Great","type":"news_article","archive_url":"https://web.archive.org/web/20260724174453/https://www.web3isgoinggreat.com/single/florence-finance-theft","credibility":2,"archive_timestamp":"2026-07-24T17:44:53+00:00"},{"url":"https://beincrypto.com/florence-finance-loses-1-45-million-hackers/","name":"Real-World Lending Project Florence Finance Suffers $1.45 Million Phishing Attack — BeInCrypto","type":"news_article","archive_url":null,"credibility":2,"archive_error":"error:no-request","archive_status":"unarchivable","archive_timestamp":null},{"url":"https://biztoc.com/x/2bc060bbf545f3ed","name":"RWA Protocol Florence Finance Loses $1.45M in Address Poisoning Attack — BizToc/Cryptoslate","type":"news_article","archive_url":null,"credibility":2,"archive_error":"error:no-request","archive_status":"unarchivable","archive_timestamp":null},{"url":"https://defillama.com/protocol/florence-finance","name":"Florence Finance Protocol — DeFiLlama","type":"on_chain","archive_url":"http://web.archive.org/web/20250918003450/https://defillama.com/protocol/florence-finance","credibility":2,"archive_timestamp":"2025-09-18T00:34:50+00:00"},{"url":"https://forum.arbitrum.foundation/t/florence-finance-final-stip-round-1/17103","name":"Florence Finance STIP Round 1 Grant Proposal — Arbitrum Foundation Forum","type":"official","archive_url":"https://web.archive.org/web/20260725034112/https://forum.arbitrum.foundation/t/florence-finance-final-stip-round-1/17103","credibility":2,"archive_timestamp":"2026-07-25T03:41:12+00:00"},{"url":"https://medium.com/coinmonks/navigating-new-financial-horizons-chiel-ruiter-on-bridging-defi-with-real-world-assets-088faed692c5","name":"Navigating New Financial Horizons: Chiel Ruiter on Bridging DeFi with Real World Assets — Coinmonks/Medium","type":"news_article","archive_url":"https://web.archive.org/web/20260725034427/https://medium.com/coinmonks/navigating-new-financial-horizons-chiel-ruiter-on-bridging-defi-with-real-world-assets-088faed692c5","credibility":3,"archive_timestamp":"2026-07-25T03:44:27+00:00"},{"url":"https://medium.com/florencefinance/florence-finance-is-now-live-on-base-5b1b7b08bd40","name":"Florence Finance: Now Live on Base — Florence Finance Medium","type":"official","archive_url":"https://web.archive.org/web/20260726033121/https://medium.com/florencefinance/florence-finance-is-now-live-on-base-5b1b7b08bd40","credibility":3,"archive_timestamp":"2026-07-26T03:31:21+00:00"},{"url":"https://coinmarketcap.com/currencies/florence-finance-medici/","name":"Florence Finance Medici (FFM) — CoinMarketCap","type":"other","archive_url":"http://web.archive.org/web/20260724170649/https://coinmarketcap.com/currencies/florence-finance-medici/","credibility":2,"archive_timestamp":"2026-07-24T17:06:49+00:00"},{"url":"https://www.florence.finance/","name":"Florence Finance Official Website","type":"official","archive_url":null,"credibility":2,"archive_error":"error:no-job","archive_status":"unarchivable","archive_timestamp":null},{"url":"https://docs.florence.finance/docs","name":"Florence Finance Documentation","type":"official","archive_url":"http://web.archive.org/web/20260421001138/https://docs.florence.finance/docs","credibility":2,"archive_timestamp":"2026-04-21T00:11:38+00:00"}],"source_tags":["defillama"],"addresses":[],"reviewed":false,"reviewed_by":null,"model_used":"claude-sonnet-4-6","created_at":"2026-05-04T02:54:36.582721+00:00","updated_at":"2026-08-29T01:35:42.392+00:00"}}