Arbitrum Secures $71 Million in Ether Linked to Kelp DAO Exploit

A portion of the funds stolen from Kelp DAO is now inaccessible. Arbitrum's Security Council froze approximately $71 million worth of ether on Monday, transferring 30,766 ETH linked to the $292 million rsETH exploit to a secure wallet that can only be accessed through further governance actions. The frozen funds are part of the stolen rsETH, a liquid restaking token representing a user's position in restaked ether. The Security Council took emergency action with input from law enforcement regarding the exploiter's identity and froze the funds without impacting any Arbitrum users or applications. This move recovers about a quarter of the total amount drained from Kelp's LayerZero-powered bridge on Saturday. The freeze leaves Kelp with a partial recovery option and escalates the ongoing dispute between Kelp and LayerZero over who bears responsibility for the exploit. The ability to freeze more stolen funds depends on the attacker's actions and whether other chains choose to act on their portions of the flow.