In a most audacious display of digital thievery, hackers seized upon the vulnerabilities of Kelp DAO’s cross-chain bridge this past Saturday-an event likened to the dramatic heists of old, yet steeped in the perplexities of modern finance. In an instant, millions of dollars vanished into the ether, sending shockwaves through the increasingly fragile realm of cryptocurrency.
The perpetrator, with a cunning reminiscent of the tricksters found in our beloved fables, pilfered roughly 116,500 rsETH-a token birthed by Kelp DAO, purporting to represent “restaked” Ethereum. This was achieved through a bridge constructed upon LayerZero, a mechanism purportedly designed for the noble purpose of inter-blockchain communication. Alas! Even the most well-intentioned constructs can be undone by human folly.
Kelp DAO, that paragon of restaking protocol, offers a tantalizing opportunity for users to deposit their staking tokens such as stETH and cbETH, and in return, they receive rsETH. Such an arrangement is akin to trading one’s cow for a handful of magic beans-promising much but fraught with risk! The exploit not only led to a sudden liquidity crisis across decentralized finance (DeFi) platforms but prompted a mad rush of withdrawals from venerable lending institutions, including Aave. Developers, like frantic chefs in a kitchen gone awry, lamented a misconfigured cross-chain verification setup within the LayerZero framework that allowed this calamity to unfold.
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This incident, affecting nearly 18% of the rsETH supply, is merely the latest in a series of unfortunate events besetting the crypto landscape this month, which included a staggering $285 million breach of Solana’s Drift protocol, alongside various smaller protocols such as CoW Swap, Zerion, Rhea Finance, and Silo Finance. In response, many protocols have hurriedly frozen their markets, urgently revising their cross-chain configurations as if preparing for an impending storm.
Where, oh where, have the funds gone?
In a recent tweet, the analytical minds at Arkham attempted to shed light on the fate of the plundered treasures.
KELPDAO EXPLOIT: WHERE ARE THE FUNDS
KelpDAO had $293.7M stolen in an attack by an entity believed to be the Lazarus Group.
The attacker forged a cross-chain message by exploiting LayerZero’s DVN (Decentralized Verified Network) to fake a withdrawal of RSETH to Ethereum.
– Arkham (@arkham) April 20, 2026
According to the astute analysts at Arkham, the grand sum of $293.7 million was spirited away by the nefarious Lazarus Group. The villain of our tale cleverly fabricated a cross-chain message, playing the part of a magician who makes valuables disappear, by exploiting LayerZero’s DVN to feign a withdrawal of rsETH to Ethereum.
Since that fateful Saturday, Arkham has diligently traced the journey of the stolen assets. They reported that the majority of the ill-gotten rsETH was deposited into both AAVE and Compound-as if the thief sought refuge among the reputable. A total of $269.74 million rsETH found its home in these DeFi sanctuaries, while the attacker withdrew a princely sum of $228.21 million in WETH and wstETH from these platforms. Furthermore, they exchanged a total of $15.34 million rsETH for $14.51 million ETH, employing the services of Kyberswap, Euler Finance, and Wintermute. Now, the elusive burglar finds themselves in possession of $242.18 million in ETH, a fortune amassed through the art of deception.
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2026-04-20 17:40