Onchain lending platform Aave has liquidated the Kelp DAO attacker’s remaining rsETH positions as part of a previously announced recovery plan, according to an announcement on Wednesday.
The liquidated collateral will be moved into the so-called Recovery Guardian, a designated multisig managed by the DeFi United initiative, which is working to restore the rsETH backing and compensate affected users.
This process represents one of the final steps in a community-wide effort to undo the damage caused by a $292 million exploit. Contributions to DeFi United have exceeded $320 million, and countless others have collaborated on ways to freeze addresses, recover stolen funds and return to a semblance of normalcy.
Aave previously noted that its liquidations, which would happen on its Ethereum and Arbitrum deployments, required a governance process. In particular, Aave voted to temporarily manipulate the rsETH oracle price to generate a deficit in the attacker’s fraudulent position.
“All such adjustments will be fully reverted upon completion of the liquidation process, with no persistent configuration changes to the Aave protocol expected as a result of the governance proposal,” Aave said last week in a post outlining the recovery plan. “Once the collateral is secured, the rsETH price oracle will be restored.”
On April 28, an attacker with suspected connections to North Korea manipulated Kelp DAO’s LayerZero-powered bridge to fraudulently mint 116,500 unbacked rsETH on Ethereum. These assets were then deployed in various onchain lending protocols, including Aave and Compound, to be exchanged for ETH.
In a rare move, the DeFi community came together to respond to the attack as a unified front and through independent actors. The Arbitrum Security Council, for instance, voted to freeze funds connected to the attack, with plans to return them to DeFi United. Though at the moment the frozen funds are tied up in a separate lawsuit where plaintiffs are trying to claim them as restitution tied to terrorism-related judgments against North Korea.
© 2026 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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