Crypto's Biggest Heist of 2026: $292 Million Stolen from Kelp DAO, Leaving Wrapped Ether Stranded Across 20 Blockchains

A devastating cyber attack has struck the DeFi world, with Kelp DAO's LayerZero-powered bridge being drained of nearly 18% of the circulating supply of rsETH, a restaked ether token, valued at approximately $292 million. The incident occurred on Saturday at 17:35 UTC, when 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 funds were part of a reserve backing wrapped versions of rsETH deployed on over 20 other blockchains, including Base, Arbitrum, and Scroll. In response to the attack, Kelp DAO's emergency pauser multisig froze the protocol's core contracts, while several other DeFi platforms, such as Aave, SparkLend, and Fluid, froze their rsETH markets to prevent further losses. The attack has sent shockwaves through the DeFi community, with AAVE's price plummeting by around 10% and Lido Finance pausing further deposits into its earnETH product due to its exposure to rsETH. As the investigation into the incident continues, the DeFi community is left to ponder the potential consequences of this massive exploit, including the risk of panic redemptions and the potential for further losses. With the contagion list still growing, the incident has highlighted the vulnerabilities of cross-chain bridges and the need for enhanced security measures to protect users' funds. Whether rsETH will maintain its peg over the weekend remains to be seen, as the market waits with bated breath to see if Kelp DAO can recover any of the stolen funds and restore confidence in the DeFi ecosystem.