This post was originally published on Coinspeaker
The Arbitrum Security Council has frozen $71 million in ETH directly traceable to the Kelp DAO exploit, with the council’s published statement confirming that the frozen funds cannot be moved without a subsequent action passed through Arbitrum’s formal governance process – a procedural constraint that effectively places the recovery decision in the hands of ARB token holders rather than the council alone.
We suspect this is less a story about one freeze action and more a structural signal about the maturing capacity of Layer 2 governance infrastructure to function as a live crisis-response mechanism – a role that, until recently, most market participants assumed would remain the exclusive province of centralized exchanges and law enforcement agencies operating on longer timescales.
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Arbitrum Security Council KELP Freeze: Confirmed Action, Governance Handoff, and What the On-Chain Record Establishes
The mechanism functions as follows: the Arbitrum Security Council, a multi-signature body with emergency powers over the Arbitrum network, identified the wallet addresses holding ETH connected to the Kelp DAO exploit and executed a freeze that immobilizes those funds at the protocol level.
Under Arbitrum’s governance architecture, emergency council actions of this type
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