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

A significant portion of the stolen Kelp DAO funds has been immobilized. Arbitrum's Security Council took action on Monday, freezing approximately $71 million worth of ETH, or 30,766 units, by relocating the funds to an intermediary wallet that requires additional governance approval for access. The frozen funds are connected to the $292 million rsETH exploit that occurred on Saturday. rsETH is a liquid staking token representing a user's position 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 during the attack. Arbitrum, a layer-2 blockchain, has 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 exploit responsibility. Kelp is coordinating with ecosystem partners on a recovery fund, while the possibility of freezing additional stolen funds depends on the attacker's movements and the actions of other chains.