Arbitrum freezes $175M in suspected laundering tied to KelpDAO hack

The wallet linked to the $292 million KelpDAO exploit has started laundering about 75,700 ETH (roughly $175 million) on Ethereum, after the Arbitrum Security Council froze 30,766 ETH on Arbitrum One. Onchain analyst EmberCN said the attacker appears to be accelerating movements on Ethereum mainnet, with multiple small ETH transfers already routed through UmbraCash, a stealth-address privacy protocol. The apparent fund-splitting pattern suggests an effort to blur the trail before additional assets can be frozen. Arkham Intelligence data indicates the hacker's main wallet still holds a sizeable ETH balance, while outflows are being funneled through a secondary address associated with UmbraCash-linked transfers. The Security Council's intervention sparked a split response. Offchain Labs cofounder Steven Goldfeder defended the move, saying the elected 12-member council required nine votes to act. He also emphasized that Arbitrum's sequencer cannot move user funds and that the council acted independently of Offchain Labs and the Arbitrum Foundation. Some community members questioned the implications for decentralization, including whether a compromised council could seize onchain funds. In a separate comment, crypto executive Justin Sun mocked the governance debate, calling Tron the most decentralized blockchain. KelpDAO thanked the Security Council and credited SEAL 911 for coordinating the response, adding that it remains focused on supporting rsETH holders affected by the April 18 exploit.