Here’s what happened in crypto today

Today in crypto, Kelp DAO says its rsETH token is fully restored, industry political action committees have poured money into Texas congressional races set for run-off votes on Tuesday and a New York lawsuit seeking ownership of 39,069 dormant Bitcoin wallets raises questions over lost crypto, private keys and property law.

Kelp DAO says rsETH restored after $293M protocol hack

Ethereum liquid staking protocol Kelp DAO said on Monday that its restaked Ether token has been restored after a recovery effort, coming five weeks after the protocol suffered a $293 million exploit by North Korea’s Lazarus Group on April 18.

Kelp DAO said the final tranche of 20,373.7 Kelp DAO restaked ETH (rsETH) tokens had been sent to the LayerZero smart contract responsible for locking, minting, burning and releasing rsETH during cross-chain transfers.

“This closes the operational part of the rsETH recovery plan,” Kelp said. Several crypto protocols contributed funds to help restore rsETH’s backing under the DeFi United initiative.

Source: Stani Kulechov

The Kelp DAO hack in April caused a ripple effect throughout the crypto lending market that disrupted billions of dollars in liquidity and resurfaced concerns about the interconnectedness of decentralized finance protocols.

The first tranche of 25,000 rsETH was transferred on May 13, allowing rsETH bridging between the Ethereum mainnet and the blockchain’s layer 2 networks to reopen. Kelp reopened withdrawals for rsETH the following day and said on Tuesday that rsETH mints, redemptions and rewards operations “have been running normally.”

Crypto PAC money pours into Texas primary runoffs

Two Texas Congressional candidates supported by millions of dollars in spending from interest groups aligned with the cryptocurrency industry are headed for runoffs this week in races for the US Senate and House of Representatives.

On Tuesday, Democratic voters in Texas’ 18th congressional district will decide between incumbent Al Green and challenger Christian Menefee to run in November's general election. Statewide, voters will choose between Texas Attorney General Ken Paxton and incumbent John Cornyn for the Republican primary for US Senate.

Both Tuesday races are runoffs after none of the candidates failed to secure a majority in Texas’ March primaries. The crypto industry, through spending on media by political action committees (PACs), has stakes in both races, which could influence policy and the makeup of Congress going into 2027.

As of Sunday, Protect Progress, affiliated with the Ripple- and Coinbase-backed Fairshake PAC, reported spending $5 million to support Menefee over Green. The PAC spent $2.8 million on ads opposing Green. Menefee also has the endorsement of the Blockchain Leadership Fund, a committee backed by Anchorage Digital and Chainlink Labs, though it had not reported any expenditures as of Monday.

Source: Kalshi

New York lawsuit tests lost property claim over dormant Bitcoin

A New York lawsuit filed by Noah Doe and two Wyoming-based LLCs, ABC Company and XYZ Company, seeks a court order declaring ownership of 39,069 dormant Bitcoin addresses, raising important questions about the legal treatment of inactive Bitcoin under property laws.

Filed on May 1, the suit claims that the coins tied to the listed addresses represent legally abandoned property they found and reported to the New York Police Department and claimed under New York lost-property law.

The plaintiffs claim that the dormant Bitcoin wallets were legally “abandoned” property that they found, including wallets belonging to early Bitcoin miners and addresses attributed to Bitcoin creator Satoshi Nakamoto, among other lost coins and unidentified entities. They claim that these constitute seizable property, akin to traditional bank accounts.

The lawsuit raises important questions about the legal treatment of long-dormant Bitcoin wallets, including Satoshi-era tokens that have been inactive for over a decade. While the legal basis of the lawsuit is questionable, it is unclear how the plaintiff could recover the lost Bitcoin without possessing the private keys to access the wallets.

However, even if the court ruled in favor of the plaintiff, it would only be a symbolic move that is not technically enforceable, as the Bitcoin network has no mechanism to “reassign funds without a private key,” Noveleader, lead research analyst at investment research firm Castle Labs, told Cointelegraph, adding:

“The one narrow exception would be if any of these coins are moved to a regulated custodian or exchange, at which point a court could compel that intermediary to act.”

The research analyst argued that a significant portion of these coins may belong to deceased holders, those who lost their keys or simply to long-term holders who haven’t transacted, meaning that none of these instances constitute legal abandonment.

ABC Company, XYZ Company, Noah Doe, lawsuit against John Does holding 39,069 BTC. Source: ilawconotices.com