Egorov said that different DeFi platforms keep pointing to each other during exploits, even as they claim everything is working, while users remain unable to access their funds.

Michael Egorov, founder of Curve Finance, has called for the development of industry-wide security standards in decentralized finance, amid a surge in recent hacks originating largely from centralized single points of failure.

The KelpDAO exploit is one of the latest examples and ranks among the largest DeFi breaches in recent months, shaking the confidence of market participants.

DeFi Security Overhaul

In his latest tweet, Egorov went on to explain that many of these incidents are “absolutely preventable” and are increasingly damaging trust in the sector. He pointed to the recent scenario involving Aave, where users were unable to withdraw funds following the exploitation of rsETH, despite multiple entities in the stack, including the protocol itself and infrastructure providers, stating that their systems were functioning as intended.

Egorov argued that such blame-shifting highlights a deeper structural issue in DeFi, where reliance on interconnected systems can leave users exposed when any single component fails. He said that risks tied to centralized dependencies should be minimized wherever possible, and when unavoidable, trust should be distributed rather than concentrated.

“We should probably come together and develop safety standards for DeFi. How to build safely, and how to verify safety. Probably everyone should bring their best practices, and the projects, auditors, and risk assessment groups should know them.”

He proposed that leading ecosystem organizations such as the Ethereum Foundation and the Solana Foundation could play a role in bringing together developers, auditors, and risk experts to establish common safety principles. The Curve founder also suggested that the sector could draw lessons from traditional finance in managing unavoidable centralized risks, even as it continues working toward a more decentralized architecture.

DeFi Under Pressure

The KelpDAO exploit triggered a significant DeFi downturn, as CryptoPotato previously reported that total value locked plunged across multiple networks within a day, including steep drops on Cosmos Hub.

The stolen funds are now being moved, based on findings from ZachXBT and Arkham Intelligence. Data revealed that two major Ethereum transactions were carried out during European trading hours on Tuesday. Part of the stolen crypto is already being transferred between blockchains.

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A portion was bridged to Bitcoin using Thorchain, while another small share was sent through Umbra, a privacy-focused protocol. The laundering methods resemble past activity linked to the Lazarus Group, which has used similar routes before.

An attempt to bridge 19.6 WBTC away was intercepted and blocked by the protocol, thereby removing the assets from the attacker’s control.

Volo Protocol, a liquid staking platform built on the Sui network, reported a security breach that led to the loss of approximately $3.5 million from its vaults, according to an official update shared by the team.

The exploit impacted three vaults holding assets in WBTC, XAUm, and USDC.

Recovery Efforts Intensify

In an official update, the protocol said it detected the attack and responded immediately by notifying the Sui Foundation and other ecosystem partners, while also freezing the affected vaults to prevent further losses. As part of its control measures, all vaults have been temporarily frozen pending a full investigation and remediation process.

Volo stated that the vulnerability was isolated to the three compromised vaults and confirmed that the remaining vaults, which account for around $28 million in total value locked, are not affected and remain secure with no shared attack vector. The team also said it is working with on-chain investigators and partners to recover the stolen funds and will release a detailed post-mortem once the investigation is complete.

In subsequent updates, Volo reported freezing roughly $500,000 worth of assets linked to the exploit. In a separate development, the protocol said it had successfully blocked an attacker’s attempt to bridge 19.6 WBTC out of the hacker’s control.

Volo added that it is coordinating with ecosystem participants to determine the appropriate process to return the intercepted assets. The protocol stated it is prepared to absorb the financial loss and aims to avoid passing the impact on to users.

“We are in damage control mode now, but once that’s done, we will work out a remediation plan, and a full breakdown will be shared shortly.”

April DeFi Exploit Wave

A series of major exploits hit DeFi platforms in April. For instance, attackers drained about $285 million from the Solana-based Drift Protocol in roughly 12 minutes, and most of the funds were bridged to Ethereum shortly after. On-chain activity linked to the attack had begun as early as March 11.

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In a separate incident, NEAR protocol’s Rhea Finance lost an estimated $7.6 million after an oracle manipulation exploit. Meanwhile, KelpDAO suffered the largest DeFi hack of the year, with attackers stealing around $292 million from its cross-chain bridge built on LayerZero Labs infrastructure.

Arbitrum’s Security Council froze exploiter-held ETH after coordinating with law enforcement.

Arbitrum said its Security Council initiated an emergency intervention to secure funds linked to the recent KelpDAO exploit after identifying 30,766 ETH held on Arbitrum One in an address tied to the attacker.

User activity remained unaffected during the process.

Arbitrum Security Council Steps In

The council stated it had coordinated with law enforcement regarding the exploiter’s identity and that the action was carried out with a focus on preserving network integrity.

After conducting technical analysis and internal deliberations, Arbitrum’s council implemented a method to isolate and transfer the funds without affecting any other chain state or its users. The assets were moved to an intermediary wallet, effectively freezing them and removing access from the original address.

According to the official announcement, the transfer was completed on April 20 at 11:26 pm ET. Any further movement of the funds will require governance-level decisions in coordination with relevant stakeholders.

Just before the intervention, Onchain Labs reported that the exploiter appeared to have burned 30,766 ETH, worth $70.94 million on Arbitrum.

KelpDAO Hack

The incident traces back to the KelpDAO exploit on April 18, which led to the loss of about 116,500 rsETH tokens, worth around $292 million. It was one of the largest DeFi breaches this year. The attackers targeted KelpDAO’s cross-chain bridge built on LayerZero Labs infrastructure. According to LayerZero, the attacker gained access to components of its decentralized verified network by compromising RPC nodes and disrupting normal operations, which allowed a fraudulent cross-chain message to be approved and executed.

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LayerZero blamed the scale of the breach on KelpDAO’s use of a 1-of-1 verification setup, which lacked independent validation. KelpDAO, in response, stated,

“The 1-of-1 DVN setup is the configuration documented in LayerZero’s documentation and shipped as the default for any new OFT deployment. Kelp has operated on LayerZero infrastructure since January 2024 and has maintained an open communication channel with the LayerZero team throughout. The question of DVN configuration came up during Kelp’s L2 expansion, and defaults were affirmatively confirmed as appropriate at that time.”

The impact spread beyond the bridge as a large portion of the stolen assets moved into lending protocols. On Aave V3, for instance, the attacker deposited rsETH as collateral and borrowed large amounts of wrapped ETH. These positions were left with low health factors, which raised the possibility of bad debt within the protocol.

Interoperability protocol LayerZero claims that an inadequate setup tied to Kelp’s decentralized verifier network (DVN) enabled malicious actors to steal $290 million from Kelp DAO, adding that preliminary signs point to North Korea-linked threat actors.

An attacker drained about 116,500 Restaked ETH (rsETH), worth as much as $293 million at the time, from Kelp DAO’s LayerZero-powered rsETH bridge on Saturday.

LayerZero said Monday that the exploit stemmed from a single point of failure in Kelp’s setup, which relied on a single LayerZero DVN as the only verified path, despite LayerZero previously advising them against this.

“LayerZero and other external parties previously communicated best practices around DVN diversification to KelpDAO. Despite these recommendations, KelpDAO chose to utilize a 1/1 DVN configuration.”

In practice, that meant Kelp relied on a single verification path for cross-chain messages rather than requiring multiple independent checks.

The exploit quickly shifted attention from the technical cause to the question of who should absorb the losses, while the fallout spread into Aave, where the attacker used rsETH as collateral to borrow real liquidity.

Aave’s total value locked (TVL) had fallen by about $8.9 billion to $17.5 billion at the time of writing after the exploiter used the stolen funds to borrow on Aave, leaving about $195 million in “bad debt,” triggering withdrawals on the lending protocol.

LayerZero said Kelp’s rsETH bridge relied solely on the LayerZero Labs DVN, and argued that the incident reflected an unsafe application configuration rather than a compromise of LayerZero itself. The company said it is now urging all applications using 1/1 DVN setups to migrate to multi-DVN configurations and will stop signing or attesting messages for apps that retain the single verifier design.

Losses spark blame fight after $290 million Kelp exploit

With no recovery or compensation plan yet announced, users and market observers spent Monday debating whether losses should sit with Kelp DAO, LayerZero, Aave or rsETH holders themselves.

Yishi Wang, founder and CEO of open-source hardware wallet OneKey, said that the best path forward was to negotiate with the hacker, offer a 10% to 15% bounty, and get the bulk of the funds back.

“If negotiations fail, LayerZero’s ecosystem fund should foot the bulk of the bill—it’s got the deepest pockets and the most long-term skin in the game,” wrote the founder in a Monday X post, adding that Kelp DAO is “broke” and could make it up with tokens and future revenue, or consider selling the project.

Analytics platform DeFiLlama’s pseudonymous founder, 0xngmi, outlined three solutions, including the option to “socialize” losses among all users, “rug rsETH holders on L2s,” or try to return holder balances to a pre-hack snapshot, which would be “very hard to do,” he wrote in a Monday X post.

Cointelegraph reached out to Aave for comment, but had not received a response by publication.

Related: Hyperbridge attacker mints 1B bridged Polkadot tokens in $237K exploit

Exploit raises Aave liquidation risks

Investor concerns about the Kelp exploit have significantly reduced Ether (ETH) liquidity on Aave, the lending protocol’s core collateral asset.

This low liquidity presents a “critical safety risk where liquidations of ETH collateral cannot take place while markets are at 100% utilization,” said MoneySupply, the pseudonymous head of strategy at Aave competitor lending protocol Spark, in a Saturday X post.

“With current illiquidity conditions on Aave, a 15-20% ETHUSD price drop could cause significant bad debt accumulation (on top of any potential issues attributable to the direct rsETH exploit),” he said.

Aave said it immediately froze all rsETH in Aave v3 and V4, preventing further damage. Aave’s own smart contracts were not exploited.

Magazine: Meet the onchain crypto detectives fighting crime better than the cops

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RaveDAO has denied any role in the recent surge and sharp collapse of its RAVE token, as major crypto exchanges open probes into trading activity following allegations of market manipulation.

In a thread posted on X, the project said it was “not engaged in, nor responsible for, recent price action,” responding to mounting scrutiny after RAVE soared from roughly $0.25 to nearly $28 within days before plunging more than 80%.

The denial comes as onchain investigator ZachXBT accused the project of orchestrating a pump-and-dump scheme, pointing to concentrated token holdings and suspicious exchange flows. He claimed that more than 90% of the token supply may be controlled by insiders, calling on exchanges to take action.

Both Binance and Bitget confirmed they are reviewing the situation. “We’re looking into it,” Binance CEO Richard Teng wrote, while Bitget CEO Gracy Chen said the exchange had “started investigating” RAVE trading activity.

Related: Study finds almost no crypto protocols disclose market-maker terms

RaveDAO plans token sales to fund growth

RaveDAO also outlined plans to sell portions of unlocked tokens to fund operations, marketing and hiring. The team said it is exploring “price-triggered or performance-triggered locks” to better align incentives.

“Building a movement requires resources,” the project wrote, adding it aims to do so “sustainably and transparently.”

RaveDAO is a Web3-based entertainment project that combines electronic music events with blockchain technology, aiming to onboard users into crypto through real-world experiences like festivals and parties. It operates as a decentralized community where attendees receive NFTs for participation, while its RAVE token is used for governance, ticketing and access to events.

At the time of writing, RAVE is trading at $1.36, down by 94.95% over the past day, according to data from CoinMarketCap.

Related: Stablecoins behave like FX markets as liquidity splits: Eco CEO

DeFi hacks surge in April

As Cointelegraph reported, more than a dozen DeFi protocols and crypto firms have been hit by exploits in just over two weeks, starting with the massive $280 million Drift Protocol attack on April 1.

Other affected projects include CoW Swap, Hyperbridge, Bybit, Silo Finance, Aethir and Rhea Finance, along with exchanges and liquidity pools across multiple chains. The attacks range from smart contract bugs and oracle manipulation to access control failures and liquidity pool exploits.

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Stablecoins behave like a fragmented foreign exchange market, where liquidity is spread across blockchains and pools, creating price differences and uneven access to dollar liquidity.

Moving stablecoins looks simple on the surface. But under the hood, it’s often a multi-step transaction routed across chains and pools.

“It’s a very special case of a foreign exchange market onchain, and that leads to bad user experience, with unexpected slippage, transaction reversion and unfamiliar information when moving your dollar from point A to point B,” Ryne Saxe, CEO at stablecoin infrastructure company Eco, told Cointelegraph.

Stablecoins now have a market capitalization above $320 billion, led by Tether’s USDt (USDT) and Circle’s USDC (USDC). 

But as institutions and large traders enter the market, moving large sums of stablecoins becomes harder to execute cleanly.

Stablecoins aren’t as fungible as they seem

A stablecoin may be pegged to the dollar — or other fiat currencies — but it does not trade as a unified asset, with liquidity split across issuers, blockchains and decentralized finance (DeFi) venues, each with its own depth, pricing and access conditions.

“Stablecoins, between them, aren’t very fungible,” said Saxe. “The different profiles between those markets mean pricing and moving stablecoins seamlessly and efficiently across them is actually a hard problem that people take for granted.”

In practice, a dollar stablecoin on one chain may not be equivalent to the same asset elsewhere. Differences in collateral backing, market access and liquidity depth create pricing gaps that widen with size or in thinner markets.

Those differences are typically negligible in liquid markets and for smaller transactions. But as trades get larger, the gaps become bigger.

“The more major DeFi markets focus on stablecoins, the more chains focus on stablecoins, the more stablecoin assets there are, the more fragmented,” Saxe said. “People think these are just dollars, but they’re actually not.”

In a March report, payments startup Borderless found that pricing divergence in stablecoins depends largely on where liquidity is sourced.

Related: Instant settlement strains crypto’s capital efficiency: Ethan Buchman

The report collected hourly buy and sell rates throughout February across 66 stablecoin-to-fiat corridors — or conversion routes such as USDC to Mexican pesos — covering 33 currencies and seven blockchains. The data showed that USDC and USDT traded almost identically in most cases.

Larger differences emerged at the provider level, where pricing gaps in the same corridor could exceed hundreds of basis points, making execution quality dependent on access to liquidity and routing across venues.

Stablecoins become harder to move at size

As stablecoins currently stand, their market structure resembles foreign exchange, where dollar proxies circulate across disconnected markets, according to Saxe. That becomes more visible in larger stablecoin movements across chains.

Stablecoins have become a centerpiece for institutions moving into digital assets, used for trading, cross-border payments and onchain treasury management. Firms rely on them to move capital between venues, settle trades and access yield opportunities across DeFi markets.

Related: Why yen stablecoins are key to Japan’s crypto ambitions

Unlike retail users, institutions often move tens of millions of dollars at a time, where execution needs to be fast, predictable and efficient.

“If liquidity is spread out, trying to sell $10 million of one stablecoin and buy $10 million of another in a single step will move the market,” Saxe said. “What usually needs to happen is breaking that transaction into multiple branches, which may route differently and converge at the destination.”

In such cases, fragmentation becomes a constraint. Instead of drawing from a single pool of dollar liquidity, institutions must navigate multiple chains, issuers and venues, each with different liquidity conditions. Moving size can shift prices, require splitting trades and introduce uncertainty into execution.

“Right now, they don’t have the risk management, trust and infrastructure that they need to move or hold a lot of stablecoins at size onchain by default,” Saxe said.

Stablecoins need infrastructure, not more supply

Companies are starting to build infrastructure to address those gaps, but they are doing so from different assumptions about what the problem actually is.

Circle is treating stablecoins as the foundation of a new FX system, where multiple currencies, liquidity providers and settlement layers are connected through shared infrastructure. Meanwhile, Eco focuses on routing and execution, aggregating liquidity across fragmented markets.

Both approaches point to the issue of stablecoins existing across multiple chains or issuers, but the liquidity behind them is distributed and uneven. Moving funds requires interacting with that fragmented liquidity, which introduces pricing differences, routing complexity and execution risk. 

“Fragmentation creates more spread between prices, meaning worse execution in many cases. To solve that, you need to read across markets, see the full liquidity picture, even if it’s fragmented, and route across it,” Saxe said.

For institutions, that complexity directly limits how much capital can move onchain. As Saxe explained, stablecoin flows need to become far more predictable before institutions have the risk management and trust required to move or hold large amounts onchain.

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At least 12 DeFi protocols and crypto businesses have been attacked in just over two weeks since the $280 million Drift Protocol exploit on April 1.

Attacks aimed at crypto protocols or companies since the start of April include CoW Swap, Hyperbridge, Bybit, Dango, Silo Finance, BSC TMM, Aethir, MONA, Zerion and, most recently, Rhea Finance and the Grinex exchange. 

The Drift Protocol was hit with one of the largest exploits this year on April 1, losing around $280 million in a long-running social engineering attack suspected to involve North Korean-affiliated actors.

The attacks also come amid growing concerns this month that advancing AI models, such as Anthropic’s Claude Mythos and equivalent models, could eventually make it even easier for cyberattackers in the future.

Rhea Finance exploited for $7.6 million

DeFi protocol Rhea Finance reported on Thursday that an attacker “leveraged a vulnerability in Rhea’s Margin Trading feature to execute a coordinated pool manipulation attack,” impacting the Rhea Lend smart contract. 

Around $7.6 million was extracted, according to blockchain security firm CertiK. 

“The attacker created fake token contracts and added liquidity in fresh pools, likely misleading the oracle and validation layer,” it explained. 

Meanwhile, the Russia-linked Grinex exchange suspended operations after a $13.7 million hack on Thursday, blaming “unfriendly states” for the incursion. 

Related: Stablecoin issuer Circle faces lawsuit over $280M Drift Protocol hack

Another attack this month was aimed at the Binance Smart Chain TMM/USDT liquidity pool, which suffered a reserve manipulation attack, resulting in the loss of around $1.67 million in early April, R3ACH Network analyst Jussy said on Thursday. 

It followed just days after bridge aggregator Dango lost $410,000 from a smart contract bug on April 13.

In the same month, lending protocol Silo Finance lost $392,000 on April 3 from a misconfigured oracle exploit and decentralized GPU cloud computing platform Aethir lost $423,000 in an access control exploit on April 9. 

DPRK ups AI social engineering attacks

The Drift Protocol and Zerion wallet exploits were two examples of Democratic People’s Republic of Korea-affiliated groups using AI and social engineering to infiltrate crypto companies to steal credentials and funds. 

Malicious actors pilfered over $168.6 million in cryptocurrency from 34 DeFi protocols in the first quarter of 2026, according to data from DefiLlama.

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AllUnity, a regulated European stablecoin issuer, is expanding its euro-pegged stablecoin, EURAU, across major decentralized exchanges (DEXs).

The company announced Thursday that its EURAU stablecoin is entering liquidity pools across major DEXs, including Uniswap, currently the largest decentralized exchange by trading volumes.

The rollout includes two EURAU trading pairs, one against Tether USDt (USDT) on Ethereum, and another against USDT0 — an omnichain version of USDT — on the Tempo blockchain. It also includes the EURAU/USDT pair on Solana via the Raydium DEX.

AllUnity’s DEX push comes as uncertainty persists over how far decentralized finance (DeFi) falls within the scope of the European Union’s Markets in Crypto-Assets Regulation (MiCA) regime.

While DeFi is generally considered outside the scope of the framework, the European Central Bank last month questioned whether decentralized autonomous organizations are decentralized enough to remain outside MiCA’s regulatory perimeter.

AllUnity built EURAU under BaFin licence

AllUnity operates as a MiCA-compliant stablecoin issuer after obtaining an Electronic Money Institution license from the German Federal Financial Supervisory Authority (BaFin) in July 2025.

AllUnity launched EURAU on July 31, 2025. The token remains small by market capitalization compared with the largest euro stablecoins.

AllUnity has been expanding the presence of its EURAU stablecoin across exchanges, with listings on centralized exchanges (CEXs) such as Bullish as well as decentralized ones like Aerodrome. Aerodrome became the first DEX integration for EURAU in December 2025.

Dollar stablecoins still dominate

The MiCA framework, which entered into full force in late 2024, has often been seen as a tool to address the dominance of stablecoins pegged to the US dollar.

Some major issuers, including Tether, have openly criticized the framework and declined to seek compliance in the EU, citing concerns over its requirements, which led to some compliant exchanges delisting its USDT stablecoin.

Some banking officials have since said MiCA may not be sufficient to address the dominance of US dollar-pegged stablecoins, which still account for 97% of the $316 billion market globally, according to CoinGecko.

Related: Bank of France calls for tougher MiCA limits on stablecoin payments

As AllUnity’s DEX push also involves major US dollar stablecoins, it remains unclear how regulators will respond to these developments.

“Expanding EURAU liquidity across DEXs is an important step in building a robust and accessible euro liquidity layer,” AllUnity’s executive Rupertus Rothenhäuser said, adding:

“We’re enabling seamless euro — dollar trading, empowering institutions and liquidity providers to participate in deep, efficient markets.”

Cointelegraph contacted AllUnity for comment regarding potential conflicts with the EU regulation but did not receive a response at the time of publication.

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Key takeaways:

Despite strong ETF inflows, Bitcoin remains tied to the S&P 500 and sensitive to global macroeconomic developments.

Bitcoin futures premiums and miner selling suggest that the bear market persists despite Bitcoin trading above $74,000.

Bitcoin (BTC) reclaimed the $74,000 level on Monday following slight gains in the S&P 500 index after US President Donald Trump ordered a US blockade of the Strait of Hormuz. Traders appear to be gradually gaining confidence following strong net inflows into US-listed spot Bitcoin exchange-traded funds (ETFs) and continued accumulation by Strategy (MSTR US) but is the bear market over?

The US-listed spot Bitcoin ETFs accumulated $615 million in net inflows between Thursday and Friday, reversing the trend from the previous two days. In parallel, Strategy announced it had acquired 13,927 BTC over the past week. The $1 billion in purchases were funded through its yield-bearing instrument, Stretch (STRC US).

Despite growing demand from institutional investors, Bitcoin remains highly correlated with the S&P 500 and the broader macroeconomic movements of the US economy. Bitcoin dropped to $70,500 over the weekend after the failed US-Iran ceasefire negotiations. However, Brent crude oil prices eventually retreated to $99 on Monday, paving the way for gains in risk assets, including Bitcoin.

Bitcoin displayed strength at $74,000, but derivatives metrics have yet to flip bullish.

Bitcoin monthly futures traded at a 2% annualized premium relative to regular spot markets, indicating a lack of demand for bullish leverage. Under neutral conditions, the indicator should hold between 4% and 8% to compensate for the cost of capital. Regardless of performance over the past couple of weeks, Bitcoin is down 18% in 2026, while the S&P 500 remains relatively flat year-to-date.

Regulatory clarity may back Bitcoin’s rally

While it is impossible to pinpoint the rationale for the sharp Bitcoin correction in late January, the lack of support from US lawmakers regarding the regulatory landscape likely played an important role. US Senator Cynthia Lummis has urged her colleagues to approve the CLARITY Act, which could define how stablecoin issuers operate and establish thresholds for tokens to be deemed decentralized.

The bill is currently facing a critical window in the Senate Banking Committee. Major exchanges have recently voiced concerns about late-stage additions to decentralized finance (DeFi) restrictions and the exact scope of tokenized assets. US Securities and Exchange Commission (SEC) Chairman Paul Atkins has also stated that “it is time” for Congress to advance with the regulation.

USD stablecoins traded at a 0.4% discount to the official US dollar-to-yuan exchange rate on Monday, a typical sign of excessive demand to exit cryptocurrency markets. Balanced demand usually results in a 0.5% to 1.5% premium to compensate for the costs of traditional FX remittance and the regulatory friction caused by China’s capital controls.

Related: How Bitcoin and gold reacted differently to the Iran war shock

Bitcoin miners’ sell pressure, US macroeconomic uncertainty

Given the strong correlation with traditional markets and weak derivatives metrics, there is no basis to claim that Bitcoin’s bear market is over based solely on ETF inflows and accumulation from a handful of companies, especially as publicly listed miners have recently reduced their positions. 

MARA Holdings (MARA US) sold 15,133 BTC, while Riot Platforms (RIOT US) reduced its exposure by 2,325 BTC and Cango (CANG US) sold 2,000 BTC in the past 30 days.

For now, Bitcoin’s path to $80,000 is largely dependent on a more favorable risk perception, although short-term momentum relies mostly on the status of the US and Israel-Iran War.