Arbitrum locks more than $100 million in ETH connected to the KelpDAO exploit

crypthub

about 6 hours ago

Arbitrum’s Emergency Freeze

The Arbitrum Security Council froze 30,766 ETH linked to the KelpDAO hack and moved it to a locked intermediary wallet. This action was taken after extensive technical review to prevent the attacker from accessing the funds. Coordination with law‑enforcement authorities ensures the assets remain secured. The network, its users and applications were not disrupted by the measure.

KelpDAO Exploit Overview

Attackers exploited a vulnerability in KelpDAO’s cross‑chain bridge, minting and moving unbacked rsETH. Approximately $300 million worth of rsETH was drained and quickly used on major DeFi platforms to borrow assets such as ETH. The rapid spread forced several protocols to pause markets and assess exposure. KelpDAO responded by pausing its rsETH contracts and working with security teams to contain the loss.

LayerZero’s Security Assessment

LayerZero attributed the breach to KelpDAO’s single‑verifier architecture, a design they had warned against. Hackers compromised two RPC nodes used by LayerZero’s verifier, replacing their software with malicious versions. The altered nodes supplied false transaction data, making the fraudulent activity appear legitimate. This highlights the risks of centralized verification in cross‑chain systems.

Arbitrum locks more than $100 million in ETH connected to the KelpDAO exploit

Arbitrum’s Emergency Freeze

KelpDAO Exploit Overview

LayerZero’s Security Assessment

Arbitrum locks more than $100 million in ETH connected to the KelpDAO exploit