KelpDAO attacker converts nearly $175 million in ETH to BTC through THORChain
23 Apr 2026 · 18:04 UTC · CryptoBriefing RSS Feed · Original source
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Summary
A security attack on KelpDAO resulted in the theft of approximately 75,700 ETH (nearly $175 million). The attacker subsequently converted the stolen ETH to BTC via THORChain after routing the funds through DeFi lending markets and privacy-enhancing tools. This incident highlights ongoing security vulnerabilities within decentralized finance protocols and cross-chain bridge infrastructure.
Why it matters
Security incidents in DeFi historically trigger sharp selloffs in affected tokens and broader altcoin contraction due to contagion fears. The $175M scale is material—comparable to Poly Network (2021) and Ronin Bridge (2022) exploits. KelpDAO's prominence in liquid staking derivatives amplifies impact by affecting stETH dynamics and correlated protocols. The sophistication of the attack (DeFi routing, privacy tools, cross-chain conversion) indicates a well-resourced threat, raising systemic vulnerability concerns. Key assumptions: (1) Market interprets this as critical vulnerability warranting defensive positioning, (2) No immediate recovery or insurance limits downside protection, (3) Standard regulatory scrutiny follows. Uncertainties: Actual exposure of downstream protocols to compromised KelpDAO positions remains unclear. KelpDAO's vault architecture integrity will determine contagion scope. Bitcoin's reaction hinges on macro risk sentiment—safe-haven flows versus broader deleveraging determine directional outcome. Medium-term recovery depends on remediation speed and insurance/recovery mechanisms.
Expected impact
The KelpDAO hack creates significant near-term market turbulence, particularly in altcoins. A $175M theft from a major DeFi protocol triggers immediate contagion concerns among DeFi participants and broader risk-off sentiment. The attacker's conversion of stolen ETH to BTC via THORChain—followed by routing through privacy tools—suggests intentional laundering and fund obfuscation, signaling protracted market anxiety. In the short term (minutes to hours), altcoin markets will experience panic selling as investors reassess counterparty risk in DeFi protocols. Bitcoin may see modest safe-haven inflows but also experience volatility spillover from broader market stress. Over daily and weekly timeframes, impact magnitude depends on contagion perception and regulatory response intensity. Staking-derivative protocols and protocols with cross-chain exposure face elevated scrutiny. By monthly horizon, direct impact diminishes unless regulatory actions or cascading security incidents compound the damage.