Arbitrum, the layer-2 Ethereum blockchain, has frozen over 30,000 Ether, valued at more than $71.2 million. This emergency action was taken by a 12-member security committee appointed by the Arbitrum community.
The funds were seized from a wallet connected to the recent Kelp protocol exploit. The ETH has been transferred to an intermediary frozen wallet, inaccessible without further Arbitrum governance action.
The Kelp protocol, a liquid restaking protocol, suffered a hack that led to a loss of at least $293 million. LayerZero, which powers Kelp's bridge, has implicated North Korea in the attack.
This freeze has reignited the debate over decentralization in cryptocurrency. While some argue such actions undermine blockchain's core principles, others believe they enhance security. Critics on X raised concerns about Arbitrum's governance, citing the council's decision, approved by nine out of twelve members, as a move away from true decentralization. A council member confirmed the extensive deliberation before the freeze was enacted.