Major Crypto Heist: $292 Million Stolen from Kelp DAO, Disrupting 20 Blockchain Networks

A devastating cyber attack has drained nearly 18% of the circulating supply of restaked ether tokens from Kelp DAO's cross-chain bridge, causing widespread disruption across over 20 blockchain networks. On Saturday, at 17:35 UTC, an attacker exploited a vulnerability in LayerZero's cross-chain messaging layer, tricking the system into releasing 116,500 rsETH to an attacker-controlled address. The stolen tokens, valued at roughly $292 million, were part of the reserve backing wrapped versions of the token on various layer 2 blockchains. The attack has triggered a series of emergency measures, including the freezing of core contracts and rsETH markets on multiple DeFi platforms, such as Aave, SparkLend, and Fluid. The incident has also led to a decline in the value of AAVE, with the token falling by approximately 10% as the market reacts to the potential bad debt. Lido Finance has paused further deposits into its earnETH product, while Ethena has temporarily halted its LayerZero OFT bridges as a precautionary measure. The fallout from the attack is still unfolding, with the potential for further contagion and instability in the DeFi market. Kelp DAO has acknowledged the incident and is working with LayerZero, Unichain, and outside security specialists to investigate the exploit and recover the stolen funds.