According to Bloomberg, the DeFi restaking protocol Kelp DAO suffered approximately $293 million in losses due to a vulnerability in the LayerZero cross-chain bridge.

Hackers quickly used THORChain and similar tools to launder money.

However, the Arbitrum security committee swiftly froze approximately $71 million in ETH (over 30,000 ETH) associated with the hackers, effectively limiting further losses.

Despite this, the incident still caused TVL in DeFi to plummet by $13 billion in just a few days.

Traditional financial institutions and regulators believe this incident further demonstrates the systemic flaws in DeFi, highlighting its serious cybersecurity vulnerabilities, regulatory gaps, and money laundering risks far exceeding those of traditional finance.

On the positive side, they expect this attack to accelerate the maturation of the DeFi industry, prompting the development of stricter security standards, hybrid regulatory models, and clearer frameworks (such as the US stablecoin rules and the EU's MiCA), ultimately enhancing its long-term credibility and institutional adoption.

On the negative side, this incident caused a sharp drop in market confidence, leading to a run-like outflow of funds from the high-beta DeFi sector, protocol liquidity shortages, and potentially triggering stricter anti-money laundering scrutiny and higher compliance costs.

Overall, traditional financial institutions view this event as a painful short-term setback, but it could also be a catalyst for building a safer and more sustainable DeFi ecosystem.

Of course, you can always trust ZEROBASE.