Kelp DAO Exploit: $175M in Stolen ETH Laundered via THORChain After Major DeFi Hack

Kelp DAO Hack Funds Movement and ETH Laundering Activity

The wallet linked to the Kelp DAO exploit has reportedly laundered nearly all of the approximately 75,700 Ether stolen in a $293 million DeFi hack, significantly reducing the chance of asset recovery. The attacker converted most of the stolen ETH through THORChain, swapping it into Bitcoin (BTC) and generating around $910,000 in protocol fees during the process.

According to blockchain analyst EmberCN, the attacker began moving funds on April 22, transferring roughly $175 million worth of ETH into newly created wallets before routing them through THORChain and the privacy protocol Umbra. Arkham data shows the main attacker wallet was largely emptied shortly afterward.

Frozen Assets and Ongoing Recovery Efforts

While most funds were moved, Arbitrum’s security council successfully froze 30,766 ETH tied to the exploit, transferring it into an intermediary wallet that now requires governance approval for further action.

The exploit originated from Kelp DAO’s rsETH bridge, powered by LayerZero, where about 116,500 rsETH was drained. The attack created up to $195 million in bad debt pressure on Aave, prompting coordination between protocols to limit systemic impact.

Aave and Kelp DAO have stated they are working on recovery strategies, though risk scenarios suggest losses could range between $123 million and $230 million depending on final distribution outcomes.

Disclaimer

This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.