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

A significant portion of the funds stolen from Kelp DAO is now frozen. Arbitrum's Security Council took action on Monday, securing approximately $71 million worth of ether by transferring 30,766 ETH into a restricted intermediary wallet. This wallet can only be accessed through additional governance measures. The frozen funds are linked to the recent $292 million rsETH exploit. rsETH is a token representing a user's stake in restaked ether. The Security Council's decision was made with input from law enforcement, who identified the exploiter. The council acted swiftly to freeze the funds 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 on Saturday. The stolen funds are no longer controlled by the original address. Arbitrum, a layer-2 blockchain, has a Security Council with emergency powers to protect the network. However, such interventions on user funds are rare and contentious. The freeze provides Kelp with a partial recovery option, in addition to any further actions taken by law enforcement and chain-tracing firms. It also escalates the dispute between Kelp and LayerZero over responsibility for the exploit. Kelp is working with ecosystem partners to establish a recovery fund and is considering next steps. The ability to freeze additional stolen funds depends on the attacker's movements and whether other chains take similar actions.