$300 Million Hack Sparks $9 Billion Withdrawal from Aave

Apr 28, 2026

66 min

Apr 28, 2026 00:30

How a $300m hack unleashed a $9b drain from world's top crypto lender

## Massive Hack Hits Crypto Sector

A significant security breach involving nearly $300 million has severely impacted the digital asset market. The attack targeted Kelp DAO, leading to a massive withdrawal from Aave, a major crypto lending platform.

## Attack Details

The exploit involved the theft of a derivative form of Ether, rsETH, through a cross-chain bridge by LayerZero. Security experts suspect North Korea-linked groups due to the attack's complexity. The attackers generated 116,500 rsETH tokens without backing assets, undermining their value.

## Impact on Aave

Instead of quickly liquidating the stolen funds, the attackers used them as collateral on Aave, borrowing approximately $236 million in other cryptocurrencies. This raised concerns about the collateral's quality, prompting users to withdraw funds rapidly.

## Liquidity Crisis

Aave experienced around $9 billion in net outflows, with its total value locked dropping significantly. The situation resembled a bank run, with users prioritizing withdrawals amid uncertainty.

## Recovery Efforts

In response, Aave and other crypto firms initiated a recovery plan, raising nearly $160 million to address the bad debt. The effort aims to restore liquidity and confidence in the rsETH token.

## Broader Implications

This incident highlights vulnerabilities in decentralized finance, particularly in cross-chain bridges. It underscores the potential for isolated breaches to escalate into wider crises, emphasizing the need for robust security measures.

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