Aave reinstated WETH loan-to-value parameters across six V3 deployments on May 18, 2026, after 95.4% of unbacked Kelp DAO rsETH was recovered. The remaining gap is about ~5,200 rsETH, while 30,765 ETH (about $71M) is still frozen on Arbitrum amid a U.S. federal court dispute in Manhattan.

On May 18, the Verus-Ethereum bridge was hit by a coordinated exploit that drained about $11.5 million. The attacker removed 103.6 tBTC, 1,625 ETH, and 147,000 USDC, then swapped the proceeds into roughly 5,402 ETH held at address 0x65Cb25F9. Blockaid said it flagged the incident live and linked the wallet’s initial 1 ETH funding to Tornado Cash.

PeckShield reported that cross-chain bridges suffered eight major exploit incidents in May 2026, with attackers draining a combined $328.6 million. The tally follows April 2026's spike in bridge-related losses, including the approximately $300 million KelpDAO incident on April 18 and Drift Protocol's $200 million-plus exploit days later. Data cited in the report also puts total 2026 hack losses beyond $750 million through mid-April, with May's events adding further losses such as the Verus-Ethereum bridge drain of about $11.5 million.

Polymarket is dealing with a surge of contested market outcomes tied to its UMA Optimistic Oracle process, raising concerns about arbitration reliability and user losses. The dispute focus includes an Israel–Hezbollah cease-fire market and a Wall Street Journal-profiled bettor who lost a $567 position after betting the cease-fire would not happen. The platform also remains exposed to U.S. regulatory pressure under its 2022 CFTC consent order that required blocking U.S. users.

Aave has re-enabled borrowing against wrapped Ether (WETH) after restoring WETH loan-to-value ratios to pre-incident levels across several Aave V3 deployments. The move follows a temporary freeze tied to the rsETH recovery process after the April 18 Kelp DAO bridge exploit and is described as the final step of Phase II of the rsETH technical recovery plan.

Poland’s parliament approved a government-backed bill to implement the EU's Markets in Crypto-Assets Regulation (MiCA) on Friday, as the country faces a July deadline to adopt the rules. The move came while prosecutors expanded an investigation into the collapse of Zondacrypto, where authorities estimate customer losses exceeded 350 million zlotys (about $96 million). Political disputes over how strictly to regulate crypto also continued, including debate over competing proposals and a separate push to ban cryptoasset activity entirely.

Bernstein analysts said on Friday that Figure Technology Solutions’ May 11 first-quarter earnings report underscores how the company differs from balance sheet-based fintech lenders. The firm beat Wall Street expectations on revenue and EBITDA, and Bernstein argued FIGR could increasingly trade as a proxy for onchain loan volumes as its blockchain-native credit ecosystem scales.

Following the $292 million KelpDAO exploit on April 18, 2026, DeFi activity weakened across major protocols. DeFiLlama data indicates Aave's total value locked fell 44% over 30 days to about $14.77 billion, a roughly $11.605 billion reduction, while 31 of the top 50 protocols posted TVL declines in the same period.