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Aave restores wrapped Ether borrowing after Kelp DAO exploit, legal disputes over frozen ETH continue.

Protocol Fundamentals
18 May 2026
Crypto news
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Neutral
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Aave has resumed borrowing against wrapped Ether (WETH) across multiple markets following the Kelp DAO exploit in April, which had led to emergency restrictions. The protocol reinstated loan-to-value ratios for WETH collateral on several networks, allowing users to borrow and swap collateral again. Meanwhile, a legal dispute remains unresolved over 30,765 ETH frozen due to alleged North Korean hacking links, with court proceedings ongoing. Kelp DAO is also discontinuing rsETH bridging on several networks after June 15 as part of a security-focused consolidation effort, while Aave's total value locked has dropped significantly since the exploit.

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