Arbitrum Secures $71 Million in Ether Linked 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, moving 30,766 ETH, worth around $71 million, into a secure wallet that requires additional governance approval to access. This action follows the $292 million rsETH exploit that occurred on Saturday. The frozen funds are part of the stolen rsETH, a liquid restaking token representing a user's position in restaked ether. The Security Council, with input from law enforcement, 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. 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, interventions on user funds are rare and can be controversial. The freeze provides Kelp with a partial recovery option and escalates the dispute between Kelp and LayerZero over responsibility for the exploit. Kelp is working on a recovery fund and considering next steps, while LayerZero has not commented on the Arbitrum freeze. The ability to freeze more stolen funds depends on the attacker's movements and whether other chains take similar action.