Crypto Exploit Rocks 2026: $292 Million Stolen from Kelp DAO, Leaving Wrapped Ether Stranded Across 20 Blockchains

A recent security breach has left a significant portion of the restaked ether token's circulating supply vulnerable, with a staggering $292 million worth of rsETH stolen from Kelp DAO's LayerZero-powered bridge. The incident occurred at 17:35 UTC on Saturday, when an attacker managed to trick the cross-chain messaging layer into releasing 116,500 rsETH to a malicious address. The stolen funds represent approximately 18% of the total circulating supply of 630,000 rsETH tokens. The bridge in question held the rsETH reserve backing wrapped versions of the token deployed on over 20 other blockchains, including Base, Arbitrum, and Scroll. The attack has triggered a wave of panic, with Aave, SparkLend, and Fluid freezing their rsETH markets and Lido Finance pausing further deposits into its earnETH product. The fallout is expected to have far-reaching consequences for the DeFi ecosystem, with the potential for widespread contagion and a significant impact on the value of rsETH. As the investigation into the incident continues, the community remains on high alert, with many calling for increased security measures to prevent similar attacks in the future. The incident has also raised questions about the stability of the DeFi ecosystem, particularly in light of recent attacks on other protocols, including Solana-based perpetuals protocol Drift, which was drained of $285 million in April.