Written by Jesse Coghlan,Staff Editor
Reviewed by Felix Ng,Staff EditorArbitrum freezes $71M of Ether connected to Kelp exploit
1 hour agoGriff Green, a member of Arbitrum’s security council, said the group acted with input from law enforcement and “did not make this decision lightly."
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Follow our Subscribe onEthereum layer-2 blockchain Arbitrum on Monday froze more than 30,000 Ether worth about $71.2 million held in a wallet connected to the recent exploit of the Kelp protocol.
Arbitrum said on Monday that its security council, a 12-member body elected by the Arbitrum community, took “emergency action” to freeze 30,766 Ether (ETH) that was held in a wallet connected to the Kelp exploit.
It added that the ETH had been moved to “an intermediary frozen wallet” and was “no longer accessible to the address that originally held the funds, and can only be moved by further action by Arbitrum governance.”
Kelp, a liquid restaking protocol, was hacked for at least $293 million on Saturday through its LayerZero-powered bridge, with LayerZero accusing North Korea of carrying out the attack.
The exploit has caused millions of dollars' worth of “bad debt” in the highly interconnected crypto lending market, as the attackers used stolen Kelp tokens to borrow cryptocurrencies on the lending platform Aave.
A blockchain freezing crypto is a divisive measure in the crypto sector, with opponents of freezes arguing that such action is antithetical to the purpose of the technology, while supporters argue it enhances security and maintains a network’s integrity.
Multiple users on X criticized Arbitrum over the freeze and questioned its decentralization in light of funds being frozen by decree of a council.
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Griff Green, a member of the Arbitrum Security Council, posted to X that the group “did not make this decision lightly, there were countless hours of debates, technical, practical, ethical and political.”
Green added that nine members of the 12-member council voted to freeze the funds, but did not share further details.
Arbitrum said its council acted with input from law enforcement and “weighed its commitment to the security and integrity of the Arbitrum community without impacting any Arbitrum users or applications.”
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