Trending Now - Aave Acts to Liquidate Hacker's Assets Amid Market Shifts

WHO:

Cointelegraph - Aave, Kelp DAO, Galaxy Digital’s Thaddeus Pinakiewicz

NewsBTC - Aave, Kelp DAO, retail investors, whale investors

WHAT:

Cointelegraph - Aave liquidated the hacker's rsETH positions on Ethereum and Arbitrum.

NewsBTC - The Kelp DAO hack resulted in approximately $292 million in stolen tokens.

NewsBTC - Aave accumulated between $170 million and $230 million in bad debt due to the hack.

NewsBTC - The AAVE token price collapsed to $93.90 following the crisis.

NewsBTC - AAVE is attempting to stabilize around the $90–$100 range after a capitulation phase.

WHERE:

Cointelegraph - The incident involved the Aave lending protocol on Ethereum and Arbitrum.

NewsBTC - The Kelp DAO hack originated from a vulnerability in the rsETH bridge.

WHEN:

NewsBTC - Aave entered April 2026 as DeFi's most trusted lending protocol.

WHY:

NewsBTC - The attack exploited a vulnerability in the rsETH bridge, allowing the attacker to drain funds and deposit stolen assets as collateral on Aave.

HOW:

NewsBTC - The attacker used fraudulent assets to extract real ones by depositing stolen rsETH as collateral on Aave V3.

(UPDATED May 7, 2026 07:50 UTC)

Aave has faced a significant crisis after a hack related to the Kelp DAO resulted in approximately $292 million in stolen tokens, leading to the liquidation of the hacker's rsETH positions on Ethereum and Arbitrum. The incident has left Aave with bad debt estimated between $170 million and $230 million, causing the price of the AAVE token to plummet to $93.90, although it is now attempting to stabilize in the $90 to $100 range. This attack exploited a vulnerability in the rsETH bridge, enabling the hacker to drain funds and use the stolen assets as collateral on Aave.