The attack does not break cryptography; it feeds the contract a true price from a market the attacker controls. Borrow a large sum with a flash-loan, push a shallow pool's price far from fair value, then borrow against collateral the protocol now thinks is worth far more, or liquidate positions that now look under water. Repay the loan in the same transaction and keep the difference.
Tens of protocols have lost eight-figure sums this way. The common thread is a feed sourced from a single amm pool with modest depth, or a price derived from an lp-token whose formula could be gamed by unbalancing the pool.
Defences are known: aggregate across several deep venues, use a twap-oracle so moving the price costs money over many blocks, cap how fast a reported price may change, and refuse to act on prices from feeds that have gone stale. When evaluating a protocol, the oracle design tells you more about its safety than its audit count.
Related: oracle, flash-loan-attack, twap-oracle, price-impact