Kelp $293M exploit, RAVE probes and Warren faults Atkins

On Saturday the Kelp liquid restaking protocol was exploited. Operators paused smart contracts for the restaking token rsETH and opened an investigation after roughly $293 million was removed from the platform.

Restaking lets users lock liquid staking derivatives to support network security while keeping a tradable tokenized claim. In Kelp’s case, those token links tied staking services to lending markets and liquidity pools.

Blockchain security firms and industry executives pointed to non‑isolated lending arrangements as a key vulnerability. Michael Egorov, founder of Curve Finance, wrote in an email that earlier lending models let many tokens serve as collateral without isolating risk per asset, and advised teams to vet tokens for single points of failure and other attack surfaces before approving them as collateral.

Kelp’s pause and the size of the loss led auditors and other projects that rely on cross‑protocol integrations to review their exposures. Restaking connections can increase interactions among staking services, lending platforms and liquidity pools.

Trading in the RAVE token saw extreme volatility this week. RAVE rose from about $0.25 to nearly $28 within days and then dropped by more than 80%. An onchain investigator, ZachXBT, alleged that insiders controlled more than 90% of the token supply and described the pattern as consistent with a pump‑and‑dump.

RaveDAO posted on X that it was “not engaged in, nor responsible for, recent price action.” Binance and Bitget said they are examining trading activity. Binance CEO Richard Teng wrote on X that the exchange was “looking into it,” and Bitget CEO Gracy Chen wrote that the platform had “started investigating” flows. Exchanges said they are reviewing wallet transfers, order books and potential wash trading or other manipulation tied to concentrated holdings.

In Washington, Senator Elizabeth Warren wrote to SEC Chair Paul Atkins on Wednesday that the agency’s fiscal‑year 2025 enforcement report, released April 7, conflicted with Atkins’ testimony at a Feb. 12 congressional hearing. The report showed the number of enforcement actions initiated by the SEC at its lowest level in more than a decade, and Warren wrote that overall enforcement activity had fallen to the lowest level in over 20 years. In the letter she wrote: “Now, it is clear that my assertion regarding the SEC’s declining enforcement actions was correct…”

Regulators, exchanges and security firms have opened reviews and investigations into the Kelp breach, the RAVE trading episode and the SEC’s enforcement data.