Crypto news

Kelp DAO suffered a $292 million exploit when an attacker drained 116,500 rsETH tokens from its cross-chain bridge powered by LayerZero. The attack represents about 18% of rsETH's circulating supply and stranded wrapped versions of the token across more than 20 blockchains. The protocol paused contracts 46 minutes after the initial drain, preventing two subsequent attempts worth $100 million each. The exploit has caused contagion across DeFi, with platforms like Aave freezing rsETH markets and AAVE's price dropping about 10%. This is now the largest DeFi exploit of 2026, surpassing April's $285 million Drift protocol hack. Kelp is investigating with LayerZero and security specialists while the crypto community watches whether rsETH can maintain its peg through potential redemption pressure.

Morgan Stanley has launched the first spot Bitcoin ETF from a major U.S. bank, with its holdings now publicly traceable via on-chain wallets identified by Arkham Intelligence. The Morgan Stanley Bitcoin Trust (MSBT) began trading on April 8, 2026, with initial purchases of about $102.79 million in Bitcoin, equivalent to approximately 1,348 BTC. MSBT charges the lowest annual fee among U.S. spot Bitcoin ETFs at 0.14%, potentially attracting inflows from Morgan Stanley's $9.3 trillion wealth management division.

KelpDAO has reportedly lost over $280 million after attackers drained positions across multiple DeFi protocols on Ethereum and Arbitrum. On-chain investigator ZachXBT flagged the incident, identifying six attacker-controlled wallets moving stolen funds. The attackers received initial funding through Tornado Cash before executing token approvals and swaps through KyberSwap and KelpDAO, converting positions into ether. The pattern suggests a private-key compromise rather than a smart-contract exploit. This incident follows a sharp rise in phishing and social engineering attacks targeting high-value holders. If confirmed, it would rank among the largest individual wallet compromises on record.

Spot Bitcoin ETFs attracted nearly $1 billion in net inflows over the past week, their strongest performance in over three months, with total net assets exceeding $101 billion. Analysts attribute this to improving risk sentiment as geopolitical tensions show signs of de-escalation, particularly regarding US-Iran relations, which has reduced demand for traditional safe havens like the US dollar. Bitcoin surged above $77,000 after Iran announced the reopening of the Strait of Hormuz to commercial shipping, easing fears of supply disruptions. This move, confirmed by the US, triggered market reactions, with Brent crude falling about 10% to around $85 per barrel.

Aave V3's Wrapped Ether reserve is carrying bad debt after attackers exploited KelpDAO's rsETH liquid restaking token, using stolen rsETH as collateral to borrow WETH. The rsETH became unbacked, leaving Aave with unliquidatable positions and WETH obligations it cannot recover normally. Aave has frozen rsETH markets and stated its Umbrella backstop system will cover deficits through automatic slashing of staked aWETH. This marks the first major test of Umbrella's automated bad debt coverage and raises questions about risks of liquid restaking tokens as collateral.

Tether has provided a $127.5 million rescue package to Drift Protocol, a Solana-based DEX that suffered a $286 million exploit. As part of the deal, Drift must transition its entire ecosystem from Circle's USDC to Tether's USDT. This move challenges Circle's dominance on Solana, where USDC currently holds over 52% of stablecoin supply. Analysts view it as Tether's strategic play to capture market share in Solana's high-volume payment ecosystem. The rescue follows criticism of Circle's slower response to freezing stolen funds during the exploit. Tether's intervention positions it as a more proactive protector of user assets in the crypto space.

Aave (AAVE) dropped over 20% on April 19 after the KelpDAO rsETH exploit triggered whale selling and a record spike in ETH utilization. Three major wallets dumped nearly 60,000 AAVE tokens worth over $6 million, while over $5.4 billion in ETH left the protocol, pushing its ETH utilization to 100%. Aave stated the impact is limited to its V3 ETH market, with V4 unaffected, and implemented precautionary measures including freezing the rsETH reserve and reducing ETH loan-to-value ratios.

Charles Schwab is launching direct spot bitcoin and ethereum trading for retail clients through its new Schwab Crypto platform, integrated into existing accounts. The service will roll out in phases, with a 75 basis point transaction fee, and includes access to Schwab's tools and customer service. Paxos will handle custody and trade execution under regulated oversight.

Aave's total value locked dropped by $6.6 billion after attackers exploited Kelp's bridge, stealing $292 million worth of rsETH tokens. The attackers used the stolen tokens as collateral on Aave to borrow wrapped ether, creating a $196 million exposure on the platform. While Aave's contracts weren't compromised, the incident revealed structural risks as the protocol accepted liquid restaking tokens as collateral without accounting for bridge exploits. The attack hit Aave's dominant collateral-to-WETH pair, causing significant liquidations and raising concerns about contagion risk in DeFi.

Bitwise Asset Management has launched an Avalanche exchange-traded fund (ETF) with plans to stake the AVAX tokens held in the fund. The firm aims to leverage its in-house staking division to maximize participation in Avalanche's average staking rewards of 5.4% while maintaining liquidity. The ETF, ticker symbol BAVA, saw $400,000 in trading volume in its first 90 minutes, which analysts described as strong early performance. Bitwise's CIO highlighted Avalanche's unique structure for enterprise-grade onchain applications, noting adoption by entities like FIFA, Toyota, and Wyoming.