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Senate Files Over 100 Amendments Ahead of Crypto Bill Markup

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Senate Files Over 100 Amendments Ahead of Crypto Bill Markup

Members of the US Senate Banking Committee have filed more than 100 amendments to a crypto market structure bill set for markup on Thursday, with the proposed changes mostly related to stablecoins, software developers and ethics. 

According to a list obtained by Politico, Democratic senators have proposed dozens of changes, while Republicans are seeking slight adjustments to the bill. 

It is not clear what the specific details of each amendment are, but some concern issues the committee has been seeking to solve for months, including stablecoin yield, crypto software developer protections and ethics provisions.

The list offers insight into the issues the committee will likely debate at the bill’s markup on Thursday as it seeks to advance the measure to the Senate floor. The Senate Banking Committee indefinitely delayed a previous markup in January after major crypto lobbyist Coinbase withdrew support for the bill.

The legislation aims to divide how US market regulators oversee crypto, with the House passing a version of it in July called the CLARITY Act. Crypto and banking lobbyists, along with lawmakers, have fought over provisions on stablecoins and whether government officials should be barred from involvement in crypto.

Further restrictions on offering stablecoin yields have been the bill’s most contentious provision, with banking and crypto lobbyists failing to reach an agreement after months of negotiations.

A version of the bill released on Monday banned third-party platforms like crypto exchanges from offering yield on stablecoins in a way that is “functionally equivalent” to the payment of interest on an interest-bearing bank deposit.

The list shows Democratic Senators Jack Reed and Tina Smith introducing an amendment to “strengthen [the] prohibition on interest/yield by using a ‘substantially similar’ test rather than an ‘equivalence’ test.”

An excerpt of the leaked list showing amendments for debate by Senator Jack Reed, with one supported by Senator Tina Smith. Source: Politico

Another planned amendment from Democratic Senator Chris Van Hollen pitches an ethics provision that Democrats and some Republicans have supported, which would bar the president, vice president, senior officials, members of Congress and their families from owning, promoting or being affiliated with crypto.

Related: Seven Democrats seen as ‘key’ to advancing CLARITY Act: Galaxy

Democratic Senator Catherine Cortez Masto also plans an amendment protecting software developers by “creating a safe harbor from criminal liability for not registering as a money transmitter,” a provision that is supported by many crypto groups.

Other amendments concern sanctions, institutions engaging in crypto, and one from Democratic Senator Andy Kim that seeks to reestablish the Justice Department’s National Cryptocurrency Enforcement Team, which the department dismantled in April last year.

Republicans have a majority on the Banking Committee and in the Senate, but some party members, such as Senator Thom Tillis, have said they won’t support the bill without certain provisions.

Republicans also control the Senate, but will need some Democrats onside to pass it with a three-fifths majority to end any potential debate on the bill.

Magazine: Will the CLARITY Act be good — or bad — for DeFi?

Bhutan’s Gelephu Speeds Licensing, Banking Access for Crypto Firms

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Bhutan’s Gelephu Speeds Licensing, Banking Access for Crypto Firms

Gelephu Mindfulness City (GMC) in Bhutan is offering an accelerated licensing pathway for crypto and fintech companies already regulated in hubs such as Singapore, Hong Kong and Abu Dhabi, as the Himalayan territory pushes to position itself as a new South Asian financial center.

The framework allows qualified companies to incorporate, obtain authorization from local regulators and open a corporate bank account through a coordinated process tied to DK Bank, GMC’s official banking partner, according to a Tuesday release shared with Cointelegraph.

The move reflects growing competition among emerging jurisdictions seeking to attract crypto firms with streamlined regulation, banking access and tax incentives, as global regulators tighten oversight and warn against regulatory arbitrage.

DK Bank will still run standard Know Your Customer (KYC) and Anti-Money Laundering (AML) checks, but Jigdrel Singay, a GMC board member and digital assets and fintech lead, told Cointelegraph that companies that clear the licensing process are expected to gain access to banking services through the coordinated framework.

Singay stressed that the system is not a passport for offshore licenses and that firms must be authorized under GMC’s own rules.

Existing approvals in other hubs mainly serve to streamline due diligence and cut down on duplicated documentation, he said, adding that regulatory standards and ongoing supervision remain under GMC’s control rather than being outsourced to foreign regulators, unlike the European Union’s Markets in Crypto-Assets Regulation (MiCA) framework, which currently allows licensed firms to operate across the bloc.

Related: Europe’s MiCA regime puts smaller crypto firms under pressure

Tax incentives and Bitcoin reserves underpin GMC’s pitch

Tax and incentives are another pillar of the pitch. GMC offers targeted 0% corporate tax for priority sectors depending on investment levels, a territorial tax system broadly aligned with Singapore and Hong Kong, and exemptions on capital gains, dividends and inheritance, according to the release.

GMC’s Bitcoin Pledge. Source: GMC

Foreign employees can qualify for income tax breaks through 2030, and Singay said the aim is to encourage “real” operations and job creation rather than structures set up primarily to shift profits for tax purposes.

The project is underwritten, at least in part, by Bitcoin (BTC). Bhutan announced a “Bitcoin Development Pledge” in late 2025, committing up to 10,000 BTC from sovereign reserves to support GMC’s long-term build-out, with officials emphasizing at the time that the assets would be held as a strategic reserve rather than sold.

This year, however, blockchain analytics firms pointed to a series of large BTC outflows linked to Bhutan, suggesting hundreds of millions of dollars’ worth of potential sales, including a further 100 BTC (roughly $8.1 million) flagged by Arkham Tuesday, though those analyses are based on address-tagging and transaction heuristics that are not definitive.

Singay said reports of Bitcoin sales related to GMC were “incorrect” and said BTC remains pledged as part of the city’s strategic reserves.

Market Moves: Why is Ethereum Foundation selling? BTC futures warning signs

Circle Releases Q1 2026 Earnings Call Recap: Co-Founder Allaire Discusses Results

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Circle Releases Q1 2026 Earnings Call Recap: Co-Founder Allaire Discusses Results

Circle shared a recap of its Q1 2026 earnings call led by Co-Founder, Chairman and CEO Jeremy Allaire.

Circle, the stablecoin and blockchain infrastructure company, published a recap from its Q1 2026 earnings call on May 11, 2026, featuring remarks from Co-Founder, Chairman and CEO Jeremy Allaire. The recap was shared via the company’s official X account, summarizing financial performance and updates from the first quarter of 2026.

Circle is a major player in the stablecoin space, known for issuing USDC, one of the largest USD-pegged stablecoins in cryptocurrency. The Q1 earnings call typically covers the company’s financial results, product developments, and strategic initiatives across its blockchain and digital asset services.

Sources: Circle

This article was generated automatically by The Defiant’s AI news system from publicly available sources.

XRP traders target $1.5 as Ripple-linked token tops bitcoin (BTC) volumes in Korea

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XRP traders target $1.5 as Ripple-linked token tops bitcoin (BTC) volumes in Korea

XRP is back at the top of South Korean trading screens.

The token’s won pair was the most traded market on Upbit over the past 24 hours, with about $110.9 million in volume, ahead of bitcoin’s $88.6 million and ether’s $67 million, CoinGecko data shows. On Bithumb, XRP/KRW recorded about $41 million in volume, ranking second behind USDT/KRW and above both BTC/KRW and ETH/KRW.

That matters because Korea has long been one of XRP’s most active speculative markets. Bitcoin and ether usually dominate global exchange activity, but Korean traders have repeatedly pushed XRP into the top volume slot during periods of heightened interest, often before volatility expands.

Price-action has been muted, however. XRP traded near $1.44 to $1.45 across the two exchanges, up roughly 3% on the week. That beats bitcoin over the same period, but trails stronger gains in BNB and Solana’s SOL, both of which have risen around 8%.

The setup is less about a finished breakout and more about pressure building under a level the market has not been able to clear.

Data from CoinDesk analytics shows XRP is still battling the $1.49 to $1.50 zone, an area that has repeatedly rejected upside attempts since February. The token has continued to compress below that resistance while holding higher lows above the broader $1.40 support floor.

That kind of structure tends to matter when volume starts rotating in. Repeated tests can weaken resistance, and liquidity above current levels appears relatively thin. If sellers are absorbed near $1.50, a sustained move through that level could accelerate faster than the recent price action suggests.

Korean activity also stands out against a choppier local macro backdrop.

South Korea’s Kospi fell sharply Tuesday after comments from a presidential policy aide raised questions over how the government could return part of the country’s AI-driven corporate gains to citizens through tax revenue.

The index remains one of the world’s strongest markets this year, powered by Samsung Electronics and SK Hynix, but the pullback showed how sensitive local risk appetite has become after a steep rally.

That makes the XRP flow more notable. Traders are not simply buying everything tied to Korean risk appetite. They are concentrating activity in one of the market’s most familiar high-beta crypto names.

High volume does not guarantee upside, however. It can also mark aggressive selling or late positioning near resistance. But when XRP starts leading Korean exchange volumes while price compresses below a long-tested ceiling, the market usually pays attention.

Keel Emerges from Stealth as Profitable BaaS Platform Following Strategic Pivot

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Keel Emerges from Stealth as Profitable BaaS Platform Following Strategic Pivot

Keel, a Banking-as-a-Service (BaaS) platform based in Manchester, is officially stepping into the public eye after operating quietly for the past two years. The company emerges from stealth having already achieved profitability and secured a growing roster of fintech clients across multiple international markets.

Originally founded in 2019 under the name Frost, the business began as a consumer neobank that integrated digital banking with energy-switching tools. Frost successfully attracted more than 18,000 users and processed tens of millions of pounds in transaction volume before shifting market dynamics forced a major corporate reinvention. Keel has now been entirely reworked into an infrastructure provider shaped by that first-hand operating experience.

A strategic pivot to sustainable infrastructure
Paweł Ołtuszyk, co-founder and CEO of Keel

Over the last two years, Keel secured regulatory approval for its new business model and fully adapted its APIs for external use. Operating as an FCA-authorised Electronic Money Institution with Visa Principal Membership, the platform generated its first commercial revenue in 2024 and has since delivered consistent quarter-on-quarter growth.

Paweł Ołtuszyk, co-founder and CEO of Keel, explained that the company reached a critical crossroads in 2022 when the energy switching market stalled and wiped out Frost’s core revenue stream. Despite having acquisition offers on the table, the leadership team chose to step back and focus on creating long-term value based on incoming external demand for Frost’s underlying infrastructure.

“We made a deliberate decision not to go looking for growth before finding product-market fit,” Ołtuszyk stated. He emphasized the company’s focus on building in a strategic and sustainable way, noting that securing clients took precedence over marketing, and achieving revenue came before attempting to scale.

Integrated capabilities for a global client base

Now publicly available, Keel provides a highly integrated model designed to drastically reduce operational complexity for its users. Accessible through a single API, the platform offers multi-currency and virtual accounts, open banking capabilities, and Visa card issuance across debit, prepaid, and credit products under its own BIN sponsorship. Additionally, it provides broad access to major domestic and international payment rails, including Faster Payments, BACS, CHAPS, SEPA, SWIFT, ACH, and Fedwire.

Crucially, Keel also embeds regulatory compliance directly into its offering, providing built-in KYC, AML, fraud detection, and transaction monitoring capabilities. This comprehensive, single-platform approach has already attracted a global client base spanning the neobanking, remittance, treasury, and property sectors. Currently, Keel’s customers include fintechs backed by prominent Silicon Valley investors, as well as a Southeast Asian platform serving over 750,000 users.

CFTC Backs Kalshi in Ohio Appeals Court Fight

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CFTC Backs Kalshi in Ohio Appeals Court Fight

The US Commodity Futures Trading Commission has backed Kalshi in the company’s legal fight against the state of Ohio, asking an appeals court to affirm that the regulator has jurisdiction over prediction markets.

The CFTC filed an amicus brief in the Sixth Circuit Court of Appeals on Tuesday, accusing Ohio of “jurisdictional overreach” after state authorities told Kalshi last year to stop offering sports event contracts in the state, calling them unlicensed sports gambling.

Kalshi sued Ohio authorities in October, seeking to have a federal court stop the Ohio Casino Control Commission and the state attorney general from taking action, but the court denied the request in March, leading Kalshi to appeal the decision.

“The federal district court in Ohio took an improperly narrow view of the Commission’s jurisdiction, and we are asking the Court of Appeals to correct that error,” CFTC Chairman Mike Selig said in a statement. “As I’ve said repeatedly, the CFTC will not allow overzealous state governments to undermine the agency’s longstanding authority over these markets.”

The dispute is one of many similar cases determining whether states have the power to restrict federally regulated prediction markets and has implications for major prediction market platforms such as Kalshi and Polymarket. 

The CFTC’s latest amicus brief is its second backing a prediction market after it filed one in the Ninth Circuit Appeals Court in February supporting Crypto.com in a legal battle against regulators in Nevada.

In its brief, the CFTC argued that “Ohio’s jurisdictional overreach into the Commission’s sphere threatens regulatory upheaval,” as the agency oversees event contracts trading as swaps or binary options on designated contract markets (DCMs).

Source: Mike Selig

“If States can restrict event contracts on sports, the Commission’s longstanding jurisdiction over these other event contracts could be imperiled too,” it wrote. “The Court should enforce the Commission’s exclusive jurisdiction and hold that Ohio cannot regulate event contracts traded on DCMs.” 

Related: Prediction market battle gets closer to Supreme Court

The CFTC’s brief comes after it sued five states to assert its jurisdiction over prediction markets, launching action against regulators in Wisconsin, New York, Arizona, Connecticut and Illinois.

The states had either sent cease-and-desist letters or had sued the prediction markets Kalshi, Polymarket, Crypto.com, Robinhood, and Coinbase, all of which are CFTC-regulated DCMs, over their offering of sports event contracts.

“States cannot circumvent the clear directive of Congress,” Selig said last month after the CFTC sued Wisconsin. “Our message to Wisconsin is the same as to New York, Arizona, and others: if you interfere with the operation of federal law in regulating financial markets, we will sue you.”

Magazine: Should users be allowed to bet on war and death in prediction markets?

Senate Banking Committee Unveils 309-Page Crypto Market Structure Bill Before Thursday Markup

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Senate Banking Committee Unveils 309-Page Crypto Market Structure Bill Before Thursday Markup

The U.S. Senate Banking Committee released the full text of the Digital Asset Market Clarity Act just after midnight Monday, placing the 309-page manager’s amendment in public view 48 hours before the panel’s scheduled Senate markup on Thursday, May 14.

Chairman Tim Scott (R-SC), Subcommittee on Digital Assets Chair Cynthia Lummis (R-WY), and Senator Thom Tillis (R-NC) issued the bill text alongside a section-by-section summary. “This bill reflects serious, good-faith work across the committee and delivers the certainty, safeguards, and accountability Americans deserve,” Scott said. “It puts consumers first, combats illicit finance, cracks down on criminals and foreign adversaries and keeps the future of finance here in the United States.” 

Lummis described the text as the product of “nearly a year of bipartisan, blood, sweat, and tears.”

The stablecoin yield deal

The legislation’s most contested provision — Section 404, which governs stablecoin yield — reached its current form through three stages of negotiation. On May 1, the compromise text became public. On May 4, Senators Tillis and Angela Alsobrooks (D-MD) issued a joint statement declaring the deal final, saying they “respectfully agree to disagree” with continued banking industry pressure. 

The final language bars stablecoin issuers and affiliated digital asset service providers from paying yield on stablecoin balances if that yield is the functional or economic equivalent of bank interest. Activity-based rewards — cashback on payments, transaction-based incentives, and rewards tied to commerce — remain permitted. Holding a stablecoin with no activity generates no return.

Coinbase CEO Brian Armstrong held a live event on X on Monday in which he said, “Not everyone got everything they wanted, but they got the must-haves.” Armstrong added that Coinbase is working with at least five of the largest global banks and wants integration to be “win-win.” The SEC, CFTC, and Treasury Department will have twelve months after enactment to write the joint implementing rules.

Banking groups push back

The banking industry has not stood down. The American Bankers Association, the Bank Policy Institute, and the Independent Community Bankers of America sent a joint letter over Mother’s Day weekend to bank CEOs, urging congressional engagement to block the stablecoin provisions. 

Their core argument: yield-bearing stablecoins function as substitutes for insured deposits and threaten bank funding for mortgages and lending.

The industry front shows fractures, however. Reports indicate that large banks with consumer-facing arms oppose the language, while banks without them are more receptive, and some community banks have signaled quiet support. 

Coinbase Chief Policy Officer Faryar Shirzad called the deposit-flight argument “a fabrication and wildly overstated,” and noted that fully reserved stablecoins are not the same as fractionally-reserved bank deposits.

Senator Bernie Moreno (R-OH) called the ABA’s mobilization the “banking cartel in full panic mode” on X and confirmed his vote in favor during the upcoming Senate markup.

Galaxy Digital research published last week contended that stablecoin growth would pull trillions in foreign capital into U.S. banking infrastructure at a rate that “materially exceeds any domestic deposit migration.”

DeFi protections hold

On the DeFi front, the bill retains language drawn from the Blockchain Regulatory Certainty Act, which shields software developers who do not control customer funds from treatment as money transmitters. 

The DeFi Education Fund said in a statement that “the most important provisions for developers and infrastructure providers — the BRCA and protections under the Exchange Act — are in this bill,” and that the group would monitor amendments this week. A separate accord among Senate lawmakers, reported Monday by Punchbowl News, adds allowances for prosecutors to pursue crypto money-laundering cases within the Clarity Act framework.

A Senate ethics stalemate

The bill’s biggest remaining fault line is ethics. Senator Elizabeth Warren, Ranking Member of the Senate Banking Committee, released a statement condemning the newly unveiled crypto market structure bill text as a threat to investors, national security, and the financial system. 

She called out the bill for containing zero ethics provisions to address President Trump and his family’s $1.4 billion in crypto gains, demanding no committee member support legislation that fails to curb those conflicts of interest.

Democrats have drawn a firm line: Senator Kirsten Gillibrand said at Consensus Miami that there would be “no one voting for this bill” without an ethics provision barring members of Congress, senior administration officials, and the president from profiting through insider status in the crypto industry. 

White House crypto adviser Patrick Witt countered that the administration accepts ethics rules applying “across the board, from the president all the way down to the brand new intern on Capitol Hill,” but rejects anything targeting a specific officeholder or family.

The Thursday Senate markup is not the finish line. If the Banking Committee approves the bill, it must then merge with a version passed by the Senate Agriculture Committee, which holds jurisdiction over digital commodities. A Senate floor vote requires 60 votes — a threshold that makes Democratic support necessary and makes the ethics provision a practical prerequisite for passage. 

The White House is targeting a July 4 signing as a 250th-anniversary milestone.

DeFi App Legend Shuts Down After Missing Growth Targets

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DeFi App Legend Shuts Down After Missing Growth Targets

Decentralized finance mobile “superapp” Legend has announced it is winding down after about two years of operation, adding to a string of crypto apps deciding to shut down this year. 

Legend was a DeFi aggregator that aimed to bring DeFi to its users rather than forcing them to sign into multiple different wallets or applications to use their crypto. 

“We believed the right interface could put DeFi’s most powerful primitives in front of mainstream users.” Legend co-founder Jayson Hobby said on Tuesday. 

However, despite the product finding an audience, it didn’t “grow to the scale the company needed to be sustainable long-term,” said Hobby. “Closing is the right call for our team and our investors.”

Over 20 DeFi, NFT and GameFi protocols have announced they are shutting down this year, including ZeroLend, which said in February that it planned to shut down after three years of operations, citing an unsustainable business model.

Closure notice on the Legend website. Source: Legend.xyz

Solana DeFi aggregator Step Finance said it was closing down in February after a $40 million treasury wallet breach in January, and DeFi derivatives protocol Polynomial also ceased operations in February. 

Balancer Labs, the team behind the DeFi protocol Balancer, shuttered in March after mounting financial pressure following a $116 million hack in November.

Meanwhile, Seamless Protocol, a DeFi lending protocol on Base, said it was winding down in April, blaming volatile market conditions.

Users don’t care whether product is onchain or not

Legend is a non-custodial, mobile-first DeFi aggregator launched around late 2024 by former Compound Finance executives, including CEO Hobby. It is used for earning, trading, borrowing and swapping assets like stablecoins and Ether via integrations with other DeFi protocols such as Aave, Compound and Uniswap. 

It aimed to bring DeFi to its users rather than forcing them to sign into multiple different wallets or applications to use their crypto. 

It announced its first funding round, raising $15 million from Andreessen Horowitz and Coinbase Ventures, in February 2025. 

Related: Kelp DAO eyes unpausing withdrawals after attackers’ rsETH on Arbitrum is burned

However, Hobby said that mainstream users don’t care if a product is onchain or not. “They want outcomes,” he said. “Better yield, faster payments, more control over their money.”

“The product that wins isn’t the one that explains crypto better, it’s the one that hides it completely. The benefits are felt, not explained.”

Legend has not disclosed active user counts or total value locked figures, as it operates as an aggregator, but the TVL for the broader DeFi ecosystem has tanked 50% since October in the wider crypto bear market. 

The Legend app will keep running normally for the next 60 days and will go offline on July 12, said Hobby.

Magazine: DeFi’s billion-dollar secret: The insiders responsible for hacks 

CLARITY Act Hits Another Wall—Labor Unions Demand Changes Ahead Of May 14

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CLARITY Act Hits Another Wall—Labor Unions Demand Changes Ahead Of May 14

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Ahead of the Senate Banking Committee’s anticipated markup of the CLARITY Act on Thursday, the bill is facing a fresh wave of opposition—this time from major labor unions. 

In a letter that warned senators the measure could put retirement security at risk, multiple unions argued the legislation would introduce new instability into retirement plans for workers who have little control over how their savings are managed.

Labor Unions Raise Alarm On CLARITY Act

According to CNBC, a letter and email first seen by the network show the AFL-CIO, along with the Service Employees International Union, American Federation of Teachers, National Education Association, and the American Federation of State, County and Municipal Employees sent a message to every senator on Friday. 

The unions said the legislation “jeopardizes the stability of workers’ retirement plans, including public pensions, and introduces significant volatility to retirement savings accounts.” 

They also warned that the bill encourages the crypto industry to take “outsized risks,” arguing that if those bets fail, the costs would fall on working people and retirees rather than on crypto executives or wealthy investors.

The AFL-CIO also reportedly sent an additional email to members of the Senate Banking Committee on Friday. In that message, the union argued that without “sufficient regulation,” embedding cryptocurrencies and other digital assets into the broader economy could destabilize workers’ financial stability.

The labor push adds to pressure already building from the banking sector, where trade groups have been pushing for revisions to key CLARITY Act provisions and to parts of the GENIUS Act for stablecoins that have already been enacted. 

Last-Ditch Pitch Ahead Of Hearing

As Bitcoinist reported on Monday, Banking trade groups have opposed the stablecoin-rewards provision, arguing it gives crypto companies too much flexibility and could pull deposits away from the regulated banking system. 

They also described what they said is a last-ditch effort to win over skeptical Republicans on the Senate Banking Committee ahead of the upcoming hearing.

Even as criticism mounts, senators say negotiations have been ongoing and the committee’s markup is now expected to be based on newly released CLARITY Act text. 

On Monday night, Senate Banking Committee Chairman Tim Scott, Subcommittee on Digital Assets Chair Cynthia Lummis, and Senator Thom Tillis, released market structure bill language.

Updated Digital Asset Text

In their release, the senators said the text reflects “continued negotiations with Democratic colleagues” and extensive input from lawmakers, regulators, law enforcement, financial institutions, innovators, and consumer advocates. 

Chairman Scott said the CLARITY Act reflects what he described as good-faith work that will benefit “families, small businesses, investors, and innovators” by offering clear rules. 

He added that the CLARITY Act is intended to deliver certainty, safeguards, and accountability, put consumers first, combat illicit finance, and crack down on criminals and foreign adversaries—while also keeping what he characterized as the future of finance in the United States.

Lummis, who said Wyoming “led the way” on digital asset legislation and that Washington is now catching up, praised the updated text as the product of nearly a year of bipartisan work. 

She described it as bringing the CLARITY Act one step closer to giving the industry the clarity it says it needs, and framed the markup as a move toward solidifying US leadership in digital asset advancement.

CLARITY Act
The daily chart shows the total crypto market cap at $2.63 trillion. Source: TOTAL on TradingView.com

Featured image created with OpenArt, chart from TradingView.com 

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Kelp DAO, Aave Advances rsETH Recovery

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Kelp DAO, Aave Advances rsETH Recovery

Ethereum liquid restaking platform Kelp and decentralized lending protocol Aave have completed a series of steps to restore rsETH backing, including burning the exploiter’s rsETH tokens.

Kelp DAO detailed a post-exploit recovery for its liquid staking token rsETH on Tuesday, confirming that the hacker’s tokens were burned on the layer-2 Arbitrum network.

The 117,132 rsETH, currently worth about $278 million, will be refilled progressively over two weeks from Aave Recovery Guardian, a multisignature wallet controlled by the DeFi United recovery group and Kelp’s own recovery safe into the LayerZero OFT adapter, a smart contract that handles locking, minting, burning and releasing rsETH during cross-chain transfers.

Kelp DAO confirmed that rsETH on mainnet and layer-2 networks, which has a market capitalization of $1.5 billion, remains fully backed at all times.

The move to recover the liquid staking tokens will bring users impacted by one of this year’s largest DeFi exploits one step closer to recovery.

Kelp was hacked in April when attackers widely attributed to North Korea’s Lazarus Group exploited its rsETH adapter bridge contract, the software that manages the platform’s liquid restaking token, and drained about $293 million. 

Blockchain security firm OpenZeppelin reported at the time that no smart contract bug had been publicly identified, adding that “the system failed operationally,” and this is a category of risk the DeFi industry has “consistently underweighted.”

Tracking the exploited funds. Source: Cyvers

Withdrawals will resume within 24 hours

Kelp said it will unpause withdrawals, “tentatively within 24 hours,” after the first tranche is returned to the smart contract. All rsETH operations, including deposits, redemptions, bridging and claims, will resume as usual after the contracts are reactivated.

The protocol has also completed a “security hardening pass,” and bridging security now requires four independent attestors and 64 block confirmations, while it has deprecated some layer-2 routes.

Related: At least a dozen crypto entities attacked since Drift Protocol hack

It is also in the process of migrating to Chainlink’s Cross-Chain Interoperability Protocol (CCIP) for “further strengthened cross-chain bridging.”

Derivatives traders undeterred by DeFi hacks 

Kelp is a prominent liquid restaking protocol on Ethereum, primarily built on top of EigenLayer, where users deposit ETH or other supported liquid staking tokens for additional yields. 

The protocol’s total value locked hit an all-time high of just over $2 billion in September 2025 but has since declined by about 26% to $1.55 billion, according to DeFiLlama.

Cointelegraph reported this week that metrics showed ETH derivatives traders were holding steady and haven’t flipped bearish despite the recent DeFi exploits.

However, spot prices are down around 1% on the day, with Ether falling to a 12-day low of $2,260 in late trading on Tuesday. 

Magazine: DeFi’s billion-dollar secret: The insiders responsible for hacks 

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