Arbitrum’s Security Council said it has frozen 30,766 ETH linked to the KelpDAO exploit and transferred the funds to a secure wallet. The article values the amount at roughly $70 million. According to the council, the move was designed to cut off attacker access without changing other chain state or affecting regular Arbitrum users.
Nine of 12 council members backed the emergency action
The decision went through a formal vote inside the Security Council. Nine out of 12 members supported the freeze. Arbitrum said the step came after coordination with law enforcement, which shared information related to the exploiter’s identity. The council also stated that the technical method was narrowly targeted, focusing only on the compromised funds rather than reversing the chain or interfering with unrelated applications.
In its statement on X, the council said it carried out extensive technical checks before moving the assets. The goal was simple: secure the ETH and avoid side effects across the network. Threat researcher Vladimir S. publicly praised the action, saying Arbitrum had frozen about $70 million in hacked ETH tied to attackers associated with the recent KelpDAO incident.
The exploit began on April 18 and hit Kelp DAO’s bridge setup
The report says the attack started on April 18, 2026. Attackers exploited a weakness in Kelp DAO’s LayerZero-powered bridge and stole 116,500 rsETH, the liquid restaking token issued by Kelp DAO. The exploit was linked to compromised verifier infrastructure, which gave the attackers access to drain assets estimated at $292 million.
Arbitrum responded two days later. Instead of using a broad rollback or any measure that could ripple across the network, the council used a focused intervention aimed only at the affected funds. By the report’s account, that recovered roughly one quarter of the stolen assets.
The freeze reignites arguments over decentralization
The action quickly drew criticism from parts of the crypto community. One user on X asked whether a system can still be called decentralized if a council is able to freeze more than 30,000 ETH. Leonidas, the creator of the DOG memecoin, pushed the argument further and said decentralization has turned into a marketing term, adding that only Bitcoin is truly decentralized.
Others compared the case with separate disputes over frozen user assets, arguing that regardless of the motive, the existence of a freeze mechanism reveals a meaningful layer of control. Another user, monerify, raised a broader concern and asked whether a compromised council could in theory gain power over all on-chain funds.
Ripple CTO David Schwartz responded by saying a chain can claim that certain actions happened to funds on that chain, but it cannot force everyone else to accept those claims. Other participants can recognize a different set of claims instead. His comment did not settle the argument, though it sharpened the distinction between technical authority and social consensus.
Funds stay locked as governance and authorities weigh next steps
For now, the ETH remains frozen. The report says Arbitrum governance controls the stolen funds and is keeping them in a secure wallet. No timeline has been given for a final decision. Any next step is expected to involve coordination with relevant legal authorities. The article also says the attackers are suspected to be linked to North Korea.
For Kelp DAO users, recovering even about a quarter of the stolen assets is a meaningful development in a large DeFi hack. The debate over whether emergency intervention can coexist with decentralization remains open.