Massive Crypto Heist: $292 Million Stolen from Kelp DAO, Leaving 20 Chains with Stranded Wrapped Ether

A recent security breach has led to the theft of nearly one-fifth of the circulating supply of a restaked ether token, with the attacker making off with $292 million worth of rsETH from Kelp DAO's LayerZero-powered bridge. The incident occurred on Saturday at 17:35 UTC, when an attacker exploited a vulnerability in the cross-chain messaging layer to trick the bridge into releasing 116,500 rsETH to an attacker-controlled address. The stolen funds were part of the reserve backing wrapped versions of the token deployed on over 20 other blockchains. In response to the attack, Kelp DAO's emergency pauser multisig froze the protocol's core contracts, while several other DeFi platforms, including Aave, SparkLend, and Fluid, have frozen their rsETH markets. The fallout from the attack is still unfolding, with holders of wrapped rsETH on non-Ethereum deployments facing uncertainty over the value of their tokens. The incident has also led to a decline in the value of AAVE, with the token falling by around 10% as the market prices in potential bad debt. Lido Finance has paused further deposits into its earnETH product, which carries rsETH exposure, while Ethena has temporarily paused its LayerZero OFT bridges from Ethereum mainnet as a precaution. The attack is the latest in a series of high-profile exploits to hit the DeFi space in recent weeks, including the theft of $285 million from Solana-based perpetuals protocol Drift on April 1.