Aave liquidates attacker’s rsETH positions, advancing recovery after $293M Kelp DAO hack.

Aave Labs has completed liquidating the remaining rsETH-backed positions tied to the April Kelp DAO exploit, moving the DeFi United recovery effort closer to fully backing the restaked Ether token. The liquidation recovered collateral was transferred to a multisignature wallet controlled by DeFi United, with no impact on user funds or activation of Aave’s Umbrella protection. However, DeFi United still needs additional support from stablecoin issuers Circle, Ethena, Frax, and Kraken-backed Ink to fully recapitalize rsETH. Meanwhile, $71 million in frozen Ether linked to the exploit remains in legal limbo after a restraining notice was filed, though over 90% of Arbitrum DAO voters support releasing these funds for recovery. The incident follows hackers draining 116,500 rsETH from Kelp DAO’s bridge, causing over $190 million in bad debt and widespread DeFi market disruption.