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

A significant portion of the Kelp DAO funds is now frozen. Arbitrum's Security Council took action on Monday, securing approximately $71 million worth of ETH, roughly 30,766 coins, linked to the $292 million rsETH exploit that occurred on Saturday. The frozen funds, associated with the KelpDAO incident, have been transferred to an intermediary wallet, accessible only through additional governance procedures. rsETH is a token representing a user's stake in restaked ether. Following input from law enforcement regarding the exploiter's identity, the Security Council executed the freeze without disrupting any Arbitrum users or applications. The transfer was completed at 11:26 p.m. ET on April 20. This move recovers about a quarter of the total amount drained from Kelp's LayerZero-powered bridge, which was exploited by attackers who pulled 116,500 rsETH. The stolen funds are no longer controlled by the original address. Arbitrum, a layer-2 blockchain, has a Security Council with emergency powers to take protective action. However, such interventions on user funds are rare and contentious. The freeze provides Kelp with a partial recovery option and escalates the dispute between Kelp and LayerZero over responsibility for the exploit. Kelp is coordinating with ecosystem partners on a recovery fund and considering next steps. The ability to freeze more stolen funds depends on the attacker's movements and whether other chains take similar action.