Arbitrum Security Council Freezes $71M in ETH Stolen in Kelp Hack
The Arbitrum network's security council, a layer-2 solution for Ethereum, has frozen 30,766 ETH (approximately $71.2 million) in a wallet linked to the recent Kelp protocol hack. The funds have been moved to an "intermediate frozen wallet" and are no longer accessible to the original owner. They can only be unlocked by a network governance decision — if the owner proves they were not involved in the hack.
Why This Matters
This is the first time the security council of a major L2 solution has taken such decisive action after a hack. Arbitrum acted in coordination with law enforcement. The decision was supported by 9 of the 12 council members. According to council member Griffin Green, "the decision was not easy."
The Kelp Hack: What We Know
The attack on the liquid restaking protocol Kelp occurred on April 18 via a cross-chain bridge based on LayerZero. The damage amounted to at least $293 million. The attackers used the stolen tokens as collateral to obtain loans on lending platforms, including Aave. The platforms considered the collateral valid, even though the assets were already under the attackers' control. This resulted in unsecured debts: at Aave alone, $200 million.
Market and Community Reaction
Some users criticized Arbitrum for violating decentralization principles. However, in the wake of the incident, investors withdrew over $13 billion from DeFi projects over the weekend. This shows that the market demands protection, even at the cost of temporarily deviating from ideals.
What This Means for Ordinary People
If you use DeFi protocols, remember: even major networks can intervene in the event of a hack. This is not always bad — your funds may be recovered. But it is a reminder that full decentralization is not yet achievable.
— Editorial Team
