Kelp DAO Hacker Launders US$220M in Stolen Crypto, Recovery Prospects Fade

Efforts to recover cryptocurrency stolen from Kelp DAO have suffered a major setback after the attacker successfully laundered almost all of the roughly US$220 million (AU$308 million) in unfrozen assets taken during April’s exploit. Blockchain monitoring data shows only about US$1.7 million (AU$2.38 million) remains traceable.

The exploit on 18 April resulted in the theft of 116,500 rsETH, with total losses estimated at approximately US$293 million (AU$410.2 million). The incident pushed aggregate cryptocurrency hack losses for April to US$630 million (AU$882 million).

According to analysts tracking the movement of funds, the attacker employed a layered laundering strategy. Specter said the assets were bridged into Bitcoin using the Wasabi mixing service before being returned to Ethereum and processed through Tornado Cash. Analysts said this activity greatly reduced the likelihood of recovering the unfrozen assets.

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Court Battle Looms Over Remaining Funds 

While most of the stolen funds have now moved beyond practical tracing efforts, approximately US$71 million (AU$99.4 million) remains frozen. Those assets were previously earmarked for transfer to an Aave-controlled multi-signature wallet as part of the rsETH recovery process after approval through governance and court proceedings. A further hearing on ownership claims is due to take place in New York.

The exploit also triggered broader security reviews within decentralised finance. In response, Kelp DAO transitioned its rsETH token to Chainlink CCIP and moved away from the LayerZero-powered bridge that it linked to weaknesses in its cross-chain infrastructure.
Related: US Court Freezes Arbitrum Hack Funds, Derails DAO Compensation Plan

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