Andre Cronje: Approximately $200 million worth of rsETH was stolen due to a private key leak or misconfiguration, and ETH has been withdrawn from Aave to ensure liquidity.

Mars Finance reports that on April 19, Sonic Labs co-founder and Flying Tulip founder Andre Cronje stated: “We are still investigating the L0/rsETH incident. The preliminary report suggests it may have been due to a private key leak or a configuration error, resulting in approximately $200 million worth of rsETH being stolen. Subsequently, these rsETH were deposited into Aave to lend out ETH (due to rsETH liquidity issues). The position is technically collateralized; even without collateral, Aave’s tokens and security modules are the first line of defense against bad debt. Aave does not have mechanisms to compensate users for losses, so in extreme cases, it could lead to a ‘bank run.’ However, considering Aave currently holds about $7 billion in ETH, compared to approximately $100 million in withdrawals and a $17 million PUT exposure, the overall impact is limited. Nonetheless (this is just to illustrate our judgment), our top priority is always to ensure users’ PUT liquidity. Therefore, we have transferred all ETH from Aave into our own wrapped contract because Aave’s available liquidity has fallen below our minimum threshold.”