Arbitrum Freezes 71 Million ETH in Kelp DAO Hack Response

Arbitrum's Security Council froze approximately 71 million worth of ether on April 20, 2026, seizing funds linked to a hacker who drained nearly 292 million from the Kelp DAO protocol two days earlier, in a rare intervention that has sparked debate over blockchain governance.

The council, a 12-member body elected by the Arbitrum community, transferred 30,766 ETH from an address on the Arbitrum One network to a frozen intermediary wallet. This action, completed at 11:26 p.m. ET, prevents the original holder from accessing the assets, which can only be moved through further governance decisions. Arbitrum officials stated the move was executed with input from law enforcement on the exploiter's identity and involved extensive technical review to ensure no disruption to other users or network applications.

The underlying exploit targeted Kelp DAO, a liquid restaking protocol on Ethereum that issues rsETH tokens representing users' restaked ether positions. On April 18, attackers siphoned 116,500 rsETH, about 18.5 percent of the token's circulating supply, by exploiting vulnerabilities in the LayerZero-powered bridge used for cross-chain transfers. LayerZero's analysis indicated a...