AAVE liquidated the attacker's rsETH positions on Ethereum and Arbitrum , then transferred the recovered assets to the Recovery Guardian mechanism.
This is a step in the recovery plan following the April mining incident, aimed at reducing the risk of bad debt and keeping the affected assets under controlled processing.
- AAVE closed the attacker's rsETH positions on both the Ethereum and Arbitrum networks.
- The recovered assets have been transferred to Recovery Guardian in accordance with the approved governance plan.
- This process helps reduce exposure to bad debt, while further recovery steps are still being implemented.
AAVE liquidated the attacker's rsETH position.
AAVE confirmed it has liquidated the rsETH positions linked to the attacker on both Ethereum and Arbitrum. The proceeds from the liquidation have been transferred to a Recovery Guardian as per the governance plan.
This development suggests the protocol is handling the affected assets with tighter control, rather than leaving them at risk after the mining operation.
According to the technical roadmap approved through an AAVE Improvement Proposal, liquidation is being carried out as a predetermined step in the recovery process.
Why is this liquidation important to AAVE?
Closing the attacker's positions allowed AAVE to convert the compromised assets into recoverable assets, thereby reducing the amount of bad debt resulting from the incident.
AAVE said the seized assets are now under the management of Recovery Guardian, a mechanism designed to manage and distribute funds in the broader reimbursement process.
The protocol also stated that no other users were affected during the liquidation process, and the Umbrella core protection system remained operational.
This relates to the mining operation in April.
This new move comes after the April 18 exploit involving Kelp DAO's rsETH, where attackers used unsecured assets to borrow Capital across multiple DeFi protocols, including AAVE.
This incident resulted in significant losses and triggered coordinated measures across the ecosystem, including asset freezes and the launch of community-led recovery initiatives.
In this context, this liquidation is a step towards stabilizing the protocol's balance sheet and recovering value from the affected assets.
The next steps have not yet been fully announced.
Although some of the assets involved have been recovered, the overall recovery process is still ongoing.
AAVE says there will be further steps in the recovery roadmap, but specific details have not yet been fully released.
The situation remains complicated due to previous legal actions related to the frozen funds, leaving the timing and method of asset redistribution unclear.
Summary
AAVE has taken another step in its recovery process following the April exploit by liquidating the attacker's rsETH position and placing the recovered assets into Recovery Guardian, while further steps remain to be determined.
