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9 May 2026, 13:00

Kelp DAO Moves Forward With rsETH Collateralization on Aave After $292M Exploit

BitcoinWorld Kelp DAO Moves Forward With rsETH Collateralization on Aave After $292M Exploit Kelp DAO, the Ethereum restaking protocol that suffered a devastating exploit of approximately $292 million, has announced it will resume a series of contract operations over the next 24 hours. The operations, coordinated with the lending protocol Aave, are designed to advance the next phase of establishing rsETH as a collateral asset. Background of the Exploit On June 23, 2024, an attacker exploited a vulnerability in Kelp DAO’s smart contracts, siphoning roughly 292 million worth of assets. The incident sent shockwaves through the restaking ecosystem, raising questions about the security of liquid restaking tokens (LRTs) and their integration with major DeFi protocols like Aave. Kelp DAO paused operations shortly after the hack to assess the damage and coordinate with security teams. Next Steps for rsETH Collateralization According to an announcement on Kelp DAO’s official X account, the upcoming contract operations are a critical step toward restoring functionality and trust. The protocol is working directly with Aave to finalize the technical parameters for rsETH as collateral. This move signals that Kelp DAO is prioritizing the reactivation of its core value proposition: allowing users to deposit rsETH on Aave to borrow other assets. Why This Matters for Users For holders of rsETH, the resumption of collateralization is a key milestone. It could restore liquidity and utility to the token, which has traded under uncertainty since the hack. The successful integration with Aave would also demonstrate that Kelp DAO’s underlying infrastructure remains viable despite the exploit. However, the protocol has not yet disclosed the full extent of user fund recovery or whether the stolen assets have been traced. Broader Implications for DeFi Security The Kelp DAO incident is one of the largest in the restaking sector, a niche that has grown rapidly alongside Ethereum’s shift to proof-of-stake. Security experts have warned that the complexity of restaking contracts creates new attack surfaces. The fact that Kelp DAO is moving forward with Aave integration suggests confidence in its remediation efforts, but the community remains watchful for any signs of residual vulnerabilities. Conclusion Kelp DAO’s decision to resume contract operations for rsETH collateralization on Aave represents a cautious but determined step toward recovery. While the $292 million exploit has damaged user confidence, the protocol’s continued collaboration with Aave indicates a commitment to restoring functionality. The coming days will be critical in determining whether rsETH can regain its standing as a trusted collateral asset in the DeFi ecosystem. FAQs Q1: What exactly happened in the Kelp DAO hack? On June 23, 2024, an attacker exploited a vulnerability in Kelp DAO’s smart contracts, stealing approximately $292 million in various assets. The protocol paused operations to investigate and coordinate with security teams. Q2: What is rsETH and why is it important? rsETH is a liquid restaking token issued by Kelp DAO that represents staked ETH and restaked positions. It is designed to be used as collateral on platforms like Aave, allowing users to borrow other assets while earning staking rewards. Q3: Will users get their funds back after the hack? Kelp DAO has not yet confirmed the recovery of stolen funds. The current announcement focuses on resuming contract operations for rsETH collateralization, which is a separate step from fund recovery. Users should monitor official Kelp DAO channels for updates on restitution. This post Kelp DAO Moves Forward With rsETH Collateralization on Aave After $292M Exploit first appeared on BitcoinWorld .

9 May 2026, 11:12

Court lets Arbitrum DAO to transfer $71M in ETH tied to North Korea hack to Aave

A Manhattan judge modified a restraining notice to let Arbitrum DAO move $71 million in frozen Ether to Aave, while preserving terrorism victims’ legal claim on the funds.

9 May 2026, 07:34

Aave Begins Phase II Recovery After Liquidating Lazarus-Linked rsETH Positions

Aave liquidated 8 hacker-linked positions tied to the rsETH exploit on Aave V3. A Manhattan federal judge allowed the transfer of frozen $71M in ETH to support recovery. Aave will burn the seized rsETH and retire the related LayerZero packet. Aave has moved into the second phase of its rsETH recovery plan after liquidating the hacker-linked positions tied to last month’s exploit on Aave V3 across Ethereum and Arbitrum. In an update posted on X, the protocol confirmed that the thief’s eight identified positions were liquidated on May 6. The recovered rsETH collateral was transferred to the Recovery Guardian under a governance proposal previously approved by the Aave DAO. The exploit, linked to North Korea’s Lazarus Group, allowed attackers to use unbacked rsETH as collateral to borrow nearly $230 million in ETH from the protocol. Arbitrum’s Security Counc… Read The Full Article Aave Begins Phase II Recovery After Liquidating Lazarus-Linked rsETH Positions On Coin Edition .

9 May 2026, 06:25

US Court Approves Transfer of $71M in Frozen ETH Tied to North Korean Lazarus Group Hack

BitcoinWorld US Court Approves Transfer of $71M in Frozen ETH Tied to North Korean Lazarus Group Hack A federal court in Manhattan has authorized the transfer of approximately $71 million in Ether (ETH) that was frozen following a major exploit linked to the North Korean hacking syndicate known as the Lazarus Group. The ruling, issued by Judge Margaret Garnett, partially modifies a previous asset freeze order and marks a notable step in how decentralized finance (DeFi) protocols interact with the U.S. legal system. Court Ruling Allows Aave to Move Frozen Funds The order permits the DeFi lending protocol Aave to move the ETH—originally associated with an exploit on Arbitrum-based rsETH—to a protocol-managed wallet. This follows a governance vote by the Aave community to recover and secure the assets. The court also upheld a separate claim of approximately $877 million against North Korea, filed by victims of state-sponsored terrorism, while establishing legal protections for participants in the DAO governance process. Implications for DeFi and Legal Precedent This case is being closely watched by the crypto industry as a rare example of a DeFi protocol successfully collaborating with federal courts to create a formal procedure for asset recovery amid a state-sponsored hack. Legal analysts note that the ruling could set a precedent for how decentralized autonomous organizations (DAOs) interact with traditional legal frameworks, particularly when dealing with frozen assets tied to illicit activity. What This Means for DAO Governance Some legal experts have suggested that this case may push DAO governance votes toward a hybrid model—one that retains decentralized decision-making but also carries legal weight in court. If adopted more broadly, such a shift could increase legal clarity for DAO participants and reduce risks associated with participating in governance actions that involve contested assets. Conclusion The Manhattan court’s decision represents a significant intersection of traditional legal authority and decentralized finance. By allowing Aave to recover funds tied to a North Korean state-sponsored hack, the ruling not only aids asset recovery but also signals a maturing relationship between DeFi protocols and the U.S. judicial system. The case may influence how future crypto-related hacks are handled, particularly when state actors are involved. FAQs Q1: Why did the court allow the transfer of frozen ETH? The court partially modified the asset freeze order after Aave’s governance community voted to move the funds to a protocol-managed wallet for safekeeping, and the court found the request reasonable under the circumstances. Q2: Does this ruling affect the legal status of DAO governance votes? Yes, the ruling included protections for governance participants, signaling that properly executed DAO votes may carry legal weight in court, potentially paving the way for hybrid governance models. Q3: What is the significance of the $877 million claim against North Korea? The court upheld a separate claim by victims of terrorism against North Korea, which is unrelated to the crypto asset recovery but reinforces the broader legal context of state-sponsored hacking and victim compensation. This post US Court Approves Transfer of $71M in Frozen ETH Tied to North Korean Lazarus Group Hack first appeared on BitcoinWorld .

9 May 2026, 05:14

Arbitrum’s $71 million in ETH cleared for Aave transfer

🚨 $71 million in ETH on Arbitrum now set for transfer to Aave after a federal court’s approval. The move follows a North Korea-linked hack and months of legal wrangling over the frozen crypto. ⚖️ Critical development: The court ruling shields all participants in the $ETH transfer from legal risk and solidifies victim claims. Continue Reading: Arbitrum’s $71 million in ETH cleared for Aave transfer The post Arbitrum’s $71 million in ETH cleared for Aave transfer appeared first on COINTURK NEWS .

9 May 2026, 04:16

Judge clears path for Aave to move $71 million in ETH linked to North Korea hack

Judge Margaret Garnett allowed frozen exploit funds on Arbitrum to move to Aave, but the legal freeze follows the assets as terrorism plaintiffs continue their claim.