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Arbitrum DAO voted to release the frozen $70 million worth of ETH to the DeFi United initiative.However, a May 1 court order has restricted Arbitrum DAO from moving the recovered funds, stating they need to be distributed to creditors in past North Korea-related judgments.

TrustedVolumes confirmed a roughly $6.7 million exploit tied to a custom RFQ swap proxy under its control, not 1inch’s standard aggregation routes.Blockaid and other security firms say about $5.87 million was drained from TrustedVolumes’ Ethereum resolver, and evidence links the exploiter to the March 2025 1inch Fusion v1 hack against the same market maker.The team is “open to constructive communication” with the attacker and hopes to turn the incident into a bounty-style “white hat” resolution, echoing prior 1inch‑adjacent exploits where most funds were eventually returned.

The liquidity resolver used by multiple DeFi protocols was hit, with DEX aggregator 1inch claiming no impact on its systems.

TrustedVolumes, 1inch liquidity provider and market maker, has been hit with an exploit that has so far drained $5.87 million, according to Blockaid.Blockaid said the attacker was the same entity that exploited 1inch Fusion V1 in March 2025, which drained around $5 million.

Blockaid said TrustedVolumes lost nearly $6 million from its Ethereum resolver contract during the exploit.The attacker was linked to the earlier 1inch Fusion V1 exploit from March 2025.The case adds pressure on DeFi market makers to review approvals and custom proxy risks.

Major DeFi protocols outlined technical steps to eliminate bad debt and restore full backing for exploited rsETH tokens.

Consensys and Joseph Lubin will commit up to 30,000 ETH to DeFi United’s rsETH recovery stack.The support is pivotal to repairing collateral damage from Kelp DAO’s $293 million exploit.Aave has warned that, without this backing, the recovery “would be difficult to advance.”

Aave and Kelp want Arbitrum DAO to release 30,765 ETH for rsETH recovery efforts.The funds would move to a Gnosis Safe managed by Aave, Kelp and Certora.Some Arbitrum delegates warned that the 49-day governance process may delay urgent recovery plans.

Aave Labs and four co-author protocols filed a proposal on Saturday morning seeking the release of 30,765.67 ETH that the Arbitrum Security Council froze in connection with the April 18 Kelp DAO exploit.The funds would be earmarked for DeFi United, the cross-protocol effort to restore rsETH’s backing.The standard Constitutional AIP lifecycle runs roughly 49 days from forum publication to onchain execution, a timeline some delegates have said is too long.

Mantle published a proposal to lend up to 30,000 ETH to Aave DAO to address bad debt stemming from last week’s Kelp DAO exploit.The Mantle team wrote that the loan would generate yield and strengthen the relationship between Mantle and Aave.

Kelp DAO has countered LayerZero’s earlier statement, saying the 1-of-1 DVN setup under criticism was shipped as the default at LayerZero.Aave released a new report evaluating two potential bad debt scenarios resulting from the $292 million exploit on Kelp.

The first scenario is far cheaper but runs the risk of rsETH depegging an estimated 15%, while the second is costlier but better protects Ethereum mainnet and concentrates losses at the layer 2 level.

LayerZero said North Korean hacker group Lazarus is likely responsible for the $292 million Kelp DAO exploit.The April 18 Kelp DAO exploit has triggered a $10 billion outflow from Aave due to concerns over potential bad debt on the protocol.The total value locked across the DeFi sector fell 7% in the past 24 hours to $86 billion.

LayerZero said Lazarus likely led the Kelp DAO exploit that drained 116,500 rsETH worth $292 million.LayerZero blamed Kelp DAO’s single-DVN setup, saying no backup verifier blocked the forged cross-chain message.The exploit triggered over $10 billion in Aave outflows and a wider DeFi TVL drop.

One of the largest decentralized finance (DeFi) exploits of 2026 took place on Saturday..

A Bank of Canada staff paper found Aave V3 avoided bad debt in 2024, but said the model pushed losses onto borrowers during liquidations.