Investing Updates: Investors pull $15bn from DeFi as latest hack sparks security fears

Source:

https://www.dlnews.com/articles/defi/investors-pull-money-from-defi-after-kelpdao-hack/

ChatGPT:

Investor confidence in decentralised finance (DeFi) has taken a sharp hit after a series of major hacks, triggering over $15 billion in withdrawals from leading protocols. The latest incident involved Kelp DAO, a restaking app on Ethereum, where hackers stole approximately $294 million. The attack is part of a broader wave of cybercrime linked to North Korean groups, which have already taken nearly $600 million from crypto platforms in 2026.

The fallout has been significant. Total Value Locked (TVL) across DeFi platforms dropped sharply, with Aave alone losing about $10 billion—roughly 22% of its deposits. Other major platforms, including Morpho and Sky, also saw substantial outflows. These declines were partly due to their exposure to Kelp DAO’s compromised rsETH token. Even unrelated ecosystems were affected, as Kamino on Solana recorded $280 million in withdrawals.

Security concerns are intensifying as attacks grow more advanced. Hackers are increasingly leveraging artificial intelligence to scan code for vulnerabilities and executing complex, coordinated exploits—such as forging cross-chain messages in the Kelp DAO breach. Earlier in April, another major exploit targeted Drift on Solana, highlighting systemic weaknesses.

While DeFi has long been a target for hackers, the scale and sophistication of recent attacks are alarming investors. Losses from crypto hacks exceeded $3.4 billion in 2025, and 2026 is already on track to rival or surpass that figure. Unlike traditional finance, DeFi transactions are typically irreversible, meaning stolen funds are rarely recovered.

Overall, rising security risks are undermining trust in DeFi just as the sector seeks greater institutional adoption, posing a significant challenge to its growth.