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Arbitrum’s Security Council executed an emergency freeze of 30,766 ETH, worth approximately $71 million, on April 20, moving funds tied to Saturday’s $292 million Kelp DAO exploit into an intermediary wallet that can only be accessed through further Arbitrum governance action. The transfer was completed at 11:26 p.m. ET, according to Arbitrum’s statement on X.
The council said it acted with input from law enforcement regarding the exploiter’s identity and conducted technical diligence to confirm that no other chain states or Arbitrum users were affected. Nine of the Security Council’s 12 members voted to execute the freeze.
Council member Griff Green said the decision followed “countless hours of debates, technical, practical, ethical and political.”
Arbitrum said the frozen funds represent roughly a quarter of the total drained from Kelp’s LayerZero-powered bridge. The attacker moved the bulk of the stolen rsETH into Aave V3 as collateral, borrowing real wrapped ETH before markets were frozen. The remaining approximately $220 million is believed to have already been moved through various chains by suspected Lazarus Group actors.
The council’s intervention prompted immediate debate about the limits of decentralization. Arbitrum is a permissionless layer-2 network settled on Ethereum, and the council’s ability to freeze funds controlled by an outside address raised questions about how far emergency powers should extend, even in cases involving state-sponsored theft.
Supporters of the freeze argued the circumstances—described as a targeted North Korean hack of DeFi infrastructure—justified the action. Arbitrum said the frozen ETH will move only via a further vote by ARB token holders, who will likely decide between returning funds to affected Kelp users or holding them pending law enforcement proceedings.
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