Arbitrum Security Council Intercepts $71 Million in Stolen Kelp DAO Assets

The Arbitrum Security Council executed an emergency freeze of 30,766 ETH, valued at roughly $71 million, on Monday night. These assets were directly linked to a massive exploit targeting Kelp DAO's liquid restaking token, rsETH, which occurred last Saturday. The original breach saw attackers drain 116,500 rsETH by exploiting compromised verifier infrastructure within Kelp's LayerZero-powered bridge. Preliminary investigations by LayerZero suggest that the North Korean-linked Lazarus Group was responsible for the attack. Acting on intelligence provided by law enforcement, the Security Council transferred the funds to an intermediary wallet. Access to these assets now requires further Arbitrum governance action, effectively stripping the attacker of control without impacting other network users or applications. This recovery represents approximately 25% of the total stolen funds. The freeze complicates the ongoing dispute between Kelp DAO and LayerZero regarding who bears financial responsibility for the exploit. With $71 million now offset, the parties must determine how the remaining losses will be socialized or covered by insurance and treasury contributions. Kelp DAO has stated it is currently coordinating with ecosystem partners to establish a recovery fund and is evaluating the next steps for unpausing operations and legal coordination with affected counterparties.