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

A significant portion of the Kelp DAO funds is now inaccessible. Arbitrum's Security Council has frozen approximately $71 million worth of ether, moving 30,766 ETH linked to the $292 million rsETH exploit into a secure wallet that can only be accessed through additional Arbitrum governance measures. The frozen funds are part of the rsETH, a liquid restaking token representing a user's position in restaked ether. Following law enforcement input on the exploiter's identity, the Security Council took emergency action to freeze the funds without disrupting any Arbitrum users or applications. The transfer was completed on April 20, and the stolen funds are no longer under the control of the original address. This move recovers about a quarter of the total amount drained from Kelp's LayerZero-powered bridge, which was exploited by attackers on Saturday. Arbitrum, a layer-2 blockchain, has a Security Council with emergency powers to take protective action in such scenarios. The freeze provides Kelp with a partial recovery option and escalates the dispute between Kelp and LayerZero over responsibility for the exploit. The ability to freeze additional stolen funds depends on the attacker's movements of rsETH or its derivatives and the actions of other chains with similar emergency powers.