Kelp DAO says rsETH restored 5 weeks after $293M protocol hack

Latest NewsPublishedMay 26, 2026

Kelp DAO says that sETH mints, redemptions and rewards operations have been running smoothly since it opened withdrawals for the token earlier this month.

Ethereum liquid staking protocol Kelp DAO says its restaked Ether token has been restored with a five-week recovery effort after the protocol suffered a $293 million exploit by North Korea’s Lazarus Group on April 18.

Kelp DAO posted to X on Monday that the final tranche of 20,373.7 Kelp DAO restaked ETH (rsETH) tokens was sent to the LayerZero smart contract responsible for locking, minting, burning and releasing rsETH during cross-chain transfers.

“This closes the operational part of the rsETH recovery plan,” Kelp said. Several crypto protocols contributed funds to help restore rsETH’s backing under the DeFi United initiative.

Source: Stani Kulechov

The Kelp DAO hack in April caused a ripple effect throughout the crypto lending market that disrupted billions of dollars in liquidity and resurfaced concerns about the interconnectedness of decentralized finance protocols.

Aave was one of the hardest hit as the Kelp DAO attacker put a large portion of the stolen 116,500 rsETH up as collateral on its lending platform to borrow wrapped Ether, leaving $190 million in bad debt and triggering a wave of withdrawals.

The Kelp DAO hack was one of 25 crypto hacks in April, which saw a combined $630 million worth of losses, the worst month since February 2025, when crypto exchange Bybit was hacked for a record $1.5 billion.

The first tranche of 25,000 rsETH was transferred on May 13, allowing rsETH bridging between the Ethereum mainnet and the blockchain’s layer 2 networks to reopen.

Kelp reopened withdrawals for rsETH the following day and said on Tuesday that rsETH mints, redemptions and rewards operations “have been running normally.”.

Aave’s TVL bleed stops, but has not recovered

The Kelp DAO exploit contributed to Aave’s total value locked falling from $26.4 billion to below $14 billion, losing its long-held position as the largest DeFi protocol by TVL.

DefiLlama data shows that net outflows from Aave’s lending markets have eased over the past month.

However, Aave’s TVL has shown no signs of recovery, hovering between the $13.9 billion and $15.1 billion mark since about a week after the incident took place.

Source: Aave’s change in TVL in 2026. Source: DefiLlama

Magazine: The legal battle over who can claim DeFi’s stolen millions

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.