Arbitrum freezes ETH tied to Kelp rsETH exploit in $71M move

Arbitrum freezes ETH tied to the Kelp DAO rsETH exploit, immobilizing 30,766 ETH (about $71M) on Arbitrum One. The funds were transferred to a governance-controlled intermediary wallet, so the original holder address can no longer access them without further Arbitrum governance action. The emergency freeze was reportedly executed with input from law enforcement and said to avoid disrupting other Arbitrum users or applications. Traders are watching for partial clawback signals, since the action is expected to recover roughly one-quarter of the drained value. The attack centered on LayerZero’s bridge after attackers allegedly exploited compromised verifier infrastructure to pull 116,500 rsETH. LayerZero preliminarily attributed the exploit to North Korea’s Lazarus Group, intensifying an ongoing dispute with Kelp over responsibility and whether remaining losses should be socialized. Further freezes depend on whether the attacker moved rsETH or related derivatives before consolidating funds, and whether other chains with similar emergency powers act on their portions. For traders, the near-term impact is reduced immediate liquidation risk for some lending exposures, but continuing legal/technical uncertainty across DeFi bridges and restaking could pressure sentiment around connected risk controls.