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The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
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Sign InKelp DAO and Aave are preparing to resume rsETH operations as recovery efforts from a major security exploit progress, according to reports. The Kelp protocol was exploited on April 18, resulting in a loss of $292 million. Attackers suspected to be part of North Korea's Lazarus Group are believed to be behind the breach.
The resumption comes at a critical time for the restaking sector, as investors closely monitor the ability of protocols to secure assets following a wave of sophisticated attacks. Compared to previous incidents, this exploit ranks among the largest in 2024, prompting platforms like Aave to strengthen safety standards before reintegrating affected assets. Per market data, restoring confidence in liquid restaking tokens is vital for the stability of liquidity flows within the DeFi ecosystem.
Traders should monitor liquidity levels once official trading reactivates to ensure no sharp price slippage occurs. Looking at the economic calendar, the release of US Initial Jobless Claims on May 7, 2026, may influence general risk appetite across digital asset markets. Focus will remain on any additional security updates from Kelp DAO to ensure operational sustainability.
Update: Ether withdrawals for KelpDAO users are expected to resume within the next 24 hours following a coordinated burn of the attacker's rsETH tokens. This technical maneuver was successfully executed on the Arbitrum network to neutralize the impact of the security exploit and restore protocol integrity.
Update: The protocols have disclosed additional technical details for the recovery process, involving the redistribution of 117,132 rsETH tokens through the LayerZero OFT adapter. This plan is set to be executed over a structured two-week timeline, providing a clear roadmap for restoring liquidity to affected users.
Update: Additional reports revealed that Compound governance contributed to the recovery efforts by implementing a technical oracle fix, enabling the liquidation of stolen rsETH tokens and the recovery of approximately $30 million in lost assets.
Update: Kelp DAO has executed a strategic burn of the exploiter's rsETH tokens on the Arbitrum network and established a 14-day roadmap to refill liquidity. This recovery process will be managed via Aave’s Recovery Guardian multisig wallet to facilitate the safe resumption of withdrawals.
Update: Kelp DAO has taken decisive action by burning the exploiter's rsETH tokens on the Arbitrum network and outlining a 14-day plan to refill liquidity. This recovery phase will be managed through Aave's Recovery Guardian multisig wallet to facilitate the secure resumption of user withdrawals.
Update: A Manhattan federal judge has officially authorized the transfer of approximately 30,766 ETH, valued at $71 million, from the Arbitrum network to a wallet managed by Aave. This legal action, taken in May 2026, is designed to preserve legal claims and secure the assets tied to the suspected Lazarus Group exploit.
Update: Investigations have identified the LayerZero bridge as the primary attack vector used to drain exactly 116,500 rsETH. In response, the protocol has commenced a strategic migration to Chainlink solutions to fortify its security infrastructure and prevent future exploits as operations resume.
Update: The Kelp DAO exploit has triggered a broader industry shift, with DeFi projects representing over $3 billion in total value locked (TVL) migrating to Chainlink's CCIP infrastructure. Reports indicate that protocols are increasingly moving away from LayerZero in favor of Chainlink due to heightened security concerns surrounding cross-chain bridges.
Update: Arbitrum DAO has officially cleared the transfer of $71 million in frozen ETH to Aave, following a court ruling that enables the DAO to engage in governance activities. This move establishes a significant legal precedent for decentralized finance (DeFi) frameworks and strengthens the recovery path for the affected assets.
Update: Aave and Kelp DAO have successfully completed the first phase of their technical recovery plan by burning the exploiter's rsETH holdings on the Arbitrum network. This move marks the first major technical milestone in the asset recovery process and protocol securing prior to the full resumption of operations.