Kelp Hacked, Losses Climb to $293M As Other Protocols Impacted | Crypto Security News
Crypto security news: Kelp Hacked, Losses Climb to $293M As Other Protocols Impacted. This update explains what happened, why it matters for wallets, exchanges, traders, and users, and what the market should watch next.
Crypto Security Update
Kelp, a liquid restaking protocol, was the victim of a cyber attack on Saturday, causing the platform to pause smart contracts for its restaking token (rsETH), as it “investigates” the attack amid reports of hundreds of millions of dollars in losses.“Earlier today, we identified suspicious cross-chain activity involving rsETH. We have paused rsETH contracts across mainnet and several Layer-2s,” the Kelp platform said in an X post.The attacker exploited the rsETH adapter bridge contract, the software code that manages Kelp’s rsETH token, and drained the platform of about $293 million in funds, according to blockchain security firm Cyvers.Source: CyversThe attacker used a Tornado Cash crypto mixer-funded address and has already converted about $250 million of the stolen funds to Ether (ETH), the native cryptocurrency of the Ethereum layer-1 blockchain network, Cyvers told Cointelegraph.In response to the attack, decentralized finance (DeFi) platform Aave announced it had frozen rsETH markets on Aave V3 and V4. At least nine crypto protocols had exposure to the token and have frozen activity on their platforms in response, Cyvers said.Source: Aave“This is exactly the kind of incident that highlights the risks of composability in DeFi,” Deddy Lavid, CEO of Cyvers, told Cointelegraph. Cointelegraph reached out to Kelp but did not obtain a response by the time of publication. The incident is the latest in a string of cybersecurity hacks and exploits of crypto platforms over the last several months, as crypto losses from hacks and scams totaled about $482 million in Q1 2026.Related: Fake Ledger Live app on Apple App Store drained $9.5M from victims: ZachXBTDrift Protocol hacked for $280 millionDecentralized cryptocurrency exchange Drift Protocol also suffered an exploit in April, which drained the platform of about $280 million.The Drift Protocol team said the attack took “months of deliberate preparation,” in which the team was infiltrated by suspected North Korean state-affiliated hackers.In a post-mortem update, the Drift team said they met the attackers at a “major” crypto conference and collaborated with them for several months before the attackers deployed malware on developer machines and compromised the platform. Magazine: DeFi’s billion-dollar secret: The insiders responsible for hacksCointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy
Why This Security News Matters
First, this development may affect exchange safety, wallet security, user trust, and broader market sentiment. In addition, it may influence platform security practices, fund recovery efforts, and regulatory pressure. As a result, traders and crypto users should watch the next updates closely.
What To Watch Next
Watch for official statements, post-mortem reports, wallet warnings, exchange responses, and fund recovery updates. In particular, any new details about phishing, exploits, private key exposure, or security patches could directly affect the broader crypto market.
