Arbitrum locks more than 30,000 ETH stolen from Kelp DAO

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Olga Shendetskaya

21.04.2026

Arbitrum locks more than 30,000 ETH stolen from Kelp DAO — Arbitrum locks down funds from major DeFi exploit

The Arbitrum Security Council has frozen 30,766 ETH worth approximately $71 million connected to the $292 million exploit of Kelp DAO, one of the largest DeFi hacks of 2026. The funds were moved to a wallet controlled by the network’s governance system, potentially allowing the recovery of about a quarter of the stolen assets.

Highlights

Arbitrum froze 30,766 ETH (~$71 million) linked to the $292 million Kelp DAO exploit.
The decision was approved by a 9-12 vote of the Security Council.
The funds were moved to a governance-controlled wallet, opening the door to potential recovery of roughly one-quarter of the stolen amount.

Swift governance action

The transfer was completed on April 20 at 11:26 p.m. ET. The frozen ETH is no longer under the control of the hacker’s original address and can only be moved through a subsequent governance vote.

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This move escalates the ongoing dispute between Kelp DAO and LayerZero, the bridge provider involved in the exploit, over responsibility for the breach and how remaining losses should be distributed.

Griff Green, a member of the Arbitrum Security Council, wrote on X that the decision was not made lightly. “There were countless hours of technical, practical, ethical, and political debate,” he said. Nine out of the 12 council members voted in favor of the freeze.

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A controversial measure

Arbitrum, a layer-2 scaling solution built on Ethereum, processes transactions more cheaply and efficiently than the main chain. In its statement, the project emphasized that the council acted with input from law enforcement and weighed its responsibility to protect the integrity of the Arbitrum community without affecting regular users or applications.

Freezing assets on a blockchain remains a highly contentious practice in crypto. Critics argue that such interventions contradict the core principles of decentralization and transaction immutability, while supporters say it can enhance security and help recover funds for victims in exceptional cases.

Implications for DeFi and decentralization

The rapid response by Arbitrum’s governance body marks one of the most significant interventions following a major DeFi exploit. It raises important questions about the balance between the ideal of “code is law” and the practical need to address serious security incidents.

For the broader DeFi ecosystem, the action sets a notable precedent: it demonstrates that decentralized governance structures can move quickly to protect users, but it also fuels concerns about the potential for increased centralized control even within projects that pride themselves on being permissionless and immutable.

We also reported that the Lazarus Group was linked to the biggest DeFi exploit of 2026.

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