Arbitrum DAO Considers Unfreezing 30,766 ETH for DeFi United After Kelp DAO Exploit

Arbitrum DAO has opened a vote on whether to release about 30,766 ETH that was frozen by the Arbitrum Security Council and redirect it to DeFi United, an initiative formed earlier this month in the wake of a major attack on Kelp DAO, CoinDesk reported. In the first hour after the ballot opened, holders cast 16.9 million ARB in favor with no votes against. The vote is set to conclude on May 7. The dispute centers on funds tied to the exploit. On April 20, the Arbitrum Security Council froze roughly $71.1 million worth of ether after the Kelp DAO attacker moved it to an Arbitrum One address. The assets were sent to 0x00000000000000000000000000000000000DA0 and can only be released through governance action. At the time, the council said it consulted law enforcement while working to identify the attacker and weighed its responsibility to protect the security and integrity of the Arbitrum community, stating the move would not impact Arbitrum users or applications. The broader incident involved attackers suspected to be linked to North Korea's Lazarus Group, who exploited a crosschain communication channel used by Kelp DAO and stole $292 million of staked ETH from the protocol's version. The haul represented about 18% of the circulating rsETH supply. The stolen assets were then moved into lending platforms including Aave, Compound and Euler, where they were posted as collateral to borrow large amounts of WETH and other tokens, creating an estimated $236 million debt position. In response, several protocols, including Kelp and Aave, paused contract activity or market trading. The Arbitrum Security Council, elected by the DAO, also used emergency powers to freeze the attacker's Arbitrum One address, with 9 of 12 members voting in support. The intervention drew criticism from some observers who cited concerns about centralized authority and weakened onchain immutability, while others backed the council as aligned with its mandate to protect the Arbitrum ecosystem. DeFi United, led by Aave, was created to raise funds and rebuild support for rsETH following the exploit. As of Thursday, contributors had already donated or lent more than $311 million in ETH and stablecoins. If the Arbitrum proposal passes, the DAO would become the program's largest contributor to date. It would surpass Consensys and Joseph Lubin's combined 30,000 ETH donation and Mantle's 30,000 ETH loan. Separately, the Aave DAO is awaiting a vote on releasing 25,000 ETH, alongside a 5,000 ETH donation from Stani Kulechov. LayerZero has also pledged 5,000 ETH to DeFi United and plans to deploy an additional 5,000 ETH on Aave to earn yield. Kelp has contributed 2,000 ETH.