Arbitrum Security Council Freezes 30,766 ETH Tied to Kelp Protocol Hack, Worth About $71.2M

Arbitrum has frozen more than 30,000 ETH—roughly $71.2 million—held in wallets linked to the recent exploit of liquid staking protocol Kelp, CoinDesk reported. The Ethereum layer-2 network said Monday its 12-member, community-elected Security Council took "urgent action" to freeze 30,766 ETH connected to the Kelp attack. Arbitrum said the funds have been moved to an "intermediate frozen wallet," and that the original address can no longer access them. Any further movement of the assets would require additional steps through Arbitrum governance. Kelp was hacked Saturday through its LayerZero-powered cross-chain bridge, with losses estimated at a minimum of $293 million. LayerZero has alleged North Korea was behind the attack. The incident has also rippled into crypto lending markets. The attacker allegedly used stolen Kelp tokens to borrow other cryptocurrencies on Aave, leaving millions of dollars in "bad debt" across an interconnected set of lending positions. Asset freezes remain contentious in crypto, with critics arguing they undermine the technology's core principles and supporters saying they strengthen security and protect network integrity. On X, some users questioned Arbitrum's decentralization after the freeze. Security Council member Griff Green said on X the group "did not make this decision lightly" after extensive discussion spanning technical, practical, ethical and political considerations. Green said nine of the 12 council members voted in favor, without sharing additional details. Arbitrum said it acted on information provided by law enforcement and sought to protect the community's security and network integrity "without impacting any Arbitrum users or applications."