Arbitrum DAO Votes to Release 30,766 ETH Frozen After KelpDAO Hack for DeFi United

YM Lee

Summary

Arbitrum DAO opened voting through May 7 on a proposal to allocate about 30,766 ETH, or roughly $71.1 million in ETH, frozen by its Security Council after the KelpDAO hack to the DeFi United initiative.
Early in the vote, about 16.9 million ARB tokens had been cast in favor, with no opposing votes recorded, and DAO governance approval is required to release the frozen assets.
The hack led to the theft of about $292 million in assets, which were deposited into lending protocols including Aave, Compound and Euler, creating about $236 million in borrowing positions, while related protocols and Arbitrum's Security Council imposed address freezes and temporary market suspensions.

Forecast Trend Report by Period

Arbitrum DAO is voting on a proposal to allocate about 30,766 Ether frozen in connection with the KelpDAO hack to the DeFi recovery initiative DeFi United.

The Block reported on April 30 that the DAO had put forward a proposal to direct about 30,766 ETH frozen by its Security Council to DeFi United. The vote runs through May 7.

Early voting showed about 16.9 million ARB tokens cast in favor, with no votes against.

On April 20, Arbitrum's Security Council emergency-froze about $71.1 million of ETH that the KelpDAO attacker had moved to the Arbitrum One network. The assets were moved to a specific address, and releasing them requires approval through DAO governance.

At the time, the Security Council said it had acted while working with law enforcement to identify the attacker and had prioritized the security and integrity of the Arbitrum ecosystem.

The hack exploited KelpDAO's cross-chain communication structure and resulted in the theft of about $292 million in assets. That was equal to about 18% of rsETH's circulating supply. North Korean hacking group Lazarus was identified as being behind the attack.

The stolen assets were later deposited into lending protocols including Aave, Compound and Euler and used as collateral to create about $236 million in borrowing positions.

After the incident, some protocols, including KelpDAO and Aave, temporarily suspended contracts and markets. Arbitrum's Security Council also invoked its emergency powers to freeze the address.

ARB