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Cryptoprowl / The Arbitrum Security Council took the rare step of freezing approximately $71 million in ether, intervening to secure assets linked to a massive cross-chain exploit earlier with month.

The council executed a transfer of 30,766 ETH (CRYPTO: $ETH ) from an address controlled by an unknown exploiter to a governance-locked wallet. The transfer renders the funds inaccessible and sets the stage for a future recovery process involving law enforcement and affected stakeholders.

The intervention follows a sophisticated $292 million attack on Kelp DAO's liquid restaking token, rsETH (CRYPTO: $rsETH ).

According to security researchers, the breach originated from a compromised bridge on the LayerZero protocol. Attackers were able to mint fraudulent rsETH tokens, which were then utilized as collateral on the Aave lending platform. By looping these synthetic assets, the exploiters generated leveraged loans, leaving behind nearly $196 million in potential bad debt across several blockchain networks.

KelpDAO moved quickly to pause its smart contracts to prevent further drain. Forensic audits revealed the exploit targeted a vulnerability in single-node verifiers, a configuration reportedly used by nearly half of the applications built on LayerZero.

The Arbitrum council's decision to override the typical immutability of the blockchain has drawn mixed reactions. Griff Green, a prominent member of the council, defended the action, citing an ethical obligation to intervene against clear criminal activity. However, critics argue the move sets a concerning precedent for governance-led asset seizures.

The frozen ether represents a significant portion of the stolen value, though a substantial amount remains dispersed across various decentralized exchanges and bridges.

Arbitrum and Kelp DAO representatives confirmed they are working with forensic firms to trace the remaining assets.