Arbitrum Freezes $71M in Kelp DAO Hack Fallout

Arbitrum's security council has taken emergency action to freeze $71.2 million in Ethereum (ETH) linked to the recent Kelp DAO hack. The move aimed to recover a significant portion of the stolen assets and prevent further financial damage.

The Kelp DAO exploit, which occurred on Saturday, saw attackers use stolen funds to borrow crypto against assets they didn't own, polluting the lending market with millions in 'bad debt'. Arbitrum's security council, consisting of 12 members elected by ARB token holders, voted to freeze the funds after tracing them back to wallets connected to the hack.

The frozen ETH now sits in an intermediary wallet controlled by Arbitrum governance, inaccessible to the original holder. The council emphasized that they acted with law enforcement input and without affecting any applications running on the network.