Aave Labs has liquidated the remaining rsETH assets held by the Kelp DAO attacker on Ethereum and Arbitrum, marking a critical step in the DeFi United recovery plan.
According to an announcement on Wednesday, the liquidation involved collateral tied to the $293 million exploit on April 18. The funds were transferred to Recovery Guardian, a multisignature wallet managed by DeFi United.
Thaddeus Pinakiewicz, VP of research at Galaxy Digital, says DeFi United is now only about 10% short of the Ether needed to reinstate the Kelp DAO restaked ETH token. The April 18 attack was one of the most catastrophic crypto breaches of 2026, destroying billions in liquidity and trust in the DeFi lending market.
Aave confirmed that its Umbrella insurance system was not used, and customer funds remain unaffected. On April 28, Aave noted that clearing the hacker's collateral would release 13,000 Ether, worth roughly $30.2 million.
However, another 30,765 ETH remain frozen by Arbitrum DAO due to a restraining order from a US law firm, Gerstein Harrow LLP. Aave has filed an emergency motion to lift the order.
Arbitrum DAO members are now voting on whether to unfreeze the ETH held by the DeFi United fund. More than 90% of voters support the move, with the voting period ending Friday.