KelpDAO hacker launders ETH→BTC via THORChain after Arbitrum freeze
After the $294M KelpDAO exploit, on-chain data indicates the KelpDAO hacker has started laundering stolen ETH. Arbitrum security action reportedly froze 30,766 ETH (~$71M), but the funds were still split across multiple wallets and moved onward.
Arkham data shows three main wallets holding roughly 25K ETH each (~$57.6M, ~$59.2M, ~$57.9M). The launderer’s active wallet continues working with about 3.8K ETH (~$8M), while most transfers (about 99%) route through THORChain swaps. Over the last 24 hours, THORChain swap volume is estimated around ~$540M with fees near ~$660K.
Traders should note THORChain’s reputation for cross-chain swaps with fewer compliance frictions, which can make the attacker’s ETH exit route harder to interrupt. While the Arbitrum freeze disrupted access, the incident also reignites debate over how “permissionless” DeFi can be when centralized or governance controls intervene.
Previously, the broader KelpDAO breach involved an rsETH bridge failure, and the spillover included DeFi impacts such as Aave bad-debt risk and disrupted borrowing conditions. The report also links the KelpDAO incident to past large hacks tied to DPRK-related threats.
For ETH-focused positioning, this is a near-term risk signal: continued laundering can prolong uncertainty around stablecoin/liquidity conditions and revive “contagion” fears across connected DeFi venues.
Bearish
This update is bearish for ETH specifically because it confirms ongoing laundering activity after the KelpDAO exploit. Even after Arbitrum froze 30,766 ETH, the attacker’s continued routing—mostly via THORChain swaps at very large volume—suggests prolonged supply/exchange-pressure risk and sustained uncertainty for linked liquidity pools. Short term, the market may price in higher operational risk and potential knock-on effects across DeFi venues (especially those exposed to collateral/borrowing stress). Long term, the incident reinforces governance-and-permission assumptions in DeFi design, but the immediate trading impact is the near-term overhang from continued ETH movement and fears of broader contagion into DeFi. Hence, the expected price impact on ETH is net negative.