Arbitrum Freezes $71M in Stolen Kelp DAO ETH: L2 Trust Reset

Frequently Asked Questions

01.How did Arbitrum freeze ETH from the Kelp DAO exploit?

On April 20 2026 at 23:26 Eastern Time, the Arbitrum Security Council executed a 9-of-12 multisig action that moved 30,766 ETH from an exploiter-controlled address on Arbitrum One into a governance-controlled intermediary wallet. The council cited input from law enforcement identifying the address as linked to the Kelp DAO rsETH bridge exploit of April 18 2026.

02.What is the difference between a sequencer freeze and a protocol-native clawback?

A sequencer freeze operates at the L2 infrastructure layer through Security Council multisig action and is enforced on specific addresses without modifying the application contract. A protocol-native clawback is encoded inside the application contract itself, triggered by predefined conditions such as a pause admin, a recovery module, or a TRON-style reversible transaction list. The first centralises trust at the rollup operator, while the second centralises trust at the application deployer.

03.What EU regulations apply to an Arbitrum Security Council freeze of user funds?

Article 68 of Regulation (EU) 2023/1114 (MiCA) requires every authorised crypto asset service provider to meet the ICT resilience requirements of Regulation (EU) 2022/2554 (DORA). DORA Article 19 requires an authorised entity, including a CASP under MiCA, to report a major ICT-related incident to the competent authority without undue delay and to inform clients whose financial interests are affected by the incident or by the mitigation action taken.