Arbitrum Security Council has frozen a portion of Ethereum stolen from Kelp., 2026/04/21 12:05:21

The Arbitrum Security Council, associated with the Layer 2 solution for the Ethereum network, has frozen 30,766 ETH valued at $71.2 million that was stored in a wallet linked to the Kelp protocol hack.

According to a statement from Arbitrum, the funds have been transferred to an “intermediate frozen wallet.” They are no longer accessible to the original owner and can only be unlocked by a decision from the network governance, contingent upon proof of non-involvement in the hack.

The company noted that the decision was made with the involvement of law enforcement. Arbitrum claims that the actions did not affect users or applications within the network.

Security Council member Griff Green stated on social media platform X that 9 out of 12 members voted in favor of the freeze. He did not disclose further details, only mentioning that “the decision was not made lightly.”

The Arbitrum Security Council has taken emergency action to freeze the 30,766 ETH being held in the address on Arbitrum One that is connected to the KelpDAO exploit. The Security Council acted with input from law enforcement as to the exploiter’s identity, and, at all times,…

— Arbitrum (@arbitrum) April 21, 2026

Some users criticized Arbitrum’s actions, pointing out potential conflicts with decentralization principles.

The attack on the Kelp liquid restaking protocol occurred on April 18 via a cross-chain bridge based on LayerZero. The damage amounted to at least $293 million. The attackers utilized rights to the stolen tokens to secure loans on lending platforms, including Aave. These platforms accepted the collateral as valid, even though the assets were already under the control of the attackers. This resulted in the creation of unsecured debts, with Aave alone facing a liability of $200 million.

In the wake of the incident, investors withdrew over $13 billion from DeFi projects over the weekend.