Arbitrum Freezes $71M in KelpDAO Exploit Funds

Arbitrum's Security Council has taken swift action to mitigate the damage caused by the recent KelpDAO exploit, which resulted in significant financial losses for users of the affected DeFi protocol. According to an announcement made by Arbitrum on social media platform X, the council has successfully frozen approximately 30,766 ETH, worth over $71 million, tied to the exploit.

The funds were transferred to an intermediary frozen wallet, where they can only be moved by further action from Arbitrum governance. This move comes after what appears to be significant collaboration between law enforcement and Arbitrum's team, which provided information about the identity of the attackers. The exploitation of KelpDAO's bridge on April 18 saw an attacker mint approximately $293 million worth of unbacked rsETH and drain over $200 million in real WETH from Aave before markets could freeze.

LayerZero, the provider of LayerZero-powered bridges, including the one exploited by attackers, has published a postmortem on the incident. According to the report, the attack is likely attributable to North Korean state-sponsored hacker group Lazarus Group.