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Aave Labs will expand its asset listing process to include cybersecurity and architecture reviews after the April KelpDAO bridge exploit, aiming to raise the standard for risk management in decentralized finance (DeFi).
Speaking Thursday at Consensus Miami 2026, Aave Labs Chief Legal and Policy Officer Linda Jeng said the protocol’s existing risk framework had been too narrowly focused on financial risk and volatility. The change follows the April 18 KelpDAO bridge exploit, in which an attacker minted 116,500 unbacked rsETH worth roughly $293 million and used it as collateral on Aave to borrow real wrapped ether and wstETH.
The exploit left Aave with hundreds of millions in impaired debt and triggered a deposit run that pulled roughly $10 billion from Aave’s total value locked.
Jeng said that going forward, every asset seeking to be listed will undergo a broader assessment that covers cybersecurity, interoperability, and the underlying technical architecture, rather than focusing primarily on financial risk and volatility.
Jeng, who previously worked as a regulator during the 2008 financial crisis, said the episode created a sense of “deja vu.” However, she argued the resolution differed from a government-led bailout. Instead, an industry coalition called “DeFi United” mobilized to plug the gap, with contributions from Mantle, Consensys, EtherFi, Ethena, LayerZero, Aave founder Stani Kulechov, and others.
Aave finished liquidating the attacker’s remaining rsETH-backed positions on Ethereum and Arbitrum on Wednesday. Still, Galaxy Digital research VP Thaddeus Pinakiewicz said the rsETH supply remains roughly 10% below the Ethereum backing needed for full recovery.
A separate legal complication is also emerging. A U.S. federal court has frozen approximately $71 million in ETH that Arbitrum’s Security Council had earmarked for the recovery fund. The freeze followed claims filed by families holding terrorism judgments against North Korea, based on the exploit’s attribution to the Lazarus Group.
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