For years, crypto hacks have followed a familiar script: Money gets drained quick, disappears faster, and (usually) no one can stop it. But sometimes, desperate times call for desperate measures.
This week, after roughly $300 million was siphoned out of KelpDAO in a cascading exploit that rippled through DeFi protocols like Aave, a portion of those funds — about $72 million in ETH — sat idle just long enough for something unprecedented to happen. A small group of elected participants inside Arbitrum made a call that’s now sending shockwaves across crypto. Arbitrum intervened, and took it back.
Griff Green, a member of Arbitrum’s Security Council and a veteran of the original DAO hack in 2016 that prompted Ethereum to roll back that hack, was somehow once again at the center of the decision.
“We were able to use our emergency powers to take these funds out of the North Korea address and freeze them in a new address that they don’t have access to,” he told Coinage in a new interview.
That decision, executed after at least nine of 12 security council members voted in favor of it, may go down as one of the more consequential governance decisions in DeFi since Ethereum itself chose to fork after its own existential crisis nearly a decade ago. But as Green explains, this isn't about sacrificing some holy pact that intervention is never allowed. It's about reaching consensus that serves its users (and prevents more stolen funds from going to North Korea's hacking group —the suspected culprits of the hack.)
"The reality of the situation is that things are not immutable. It's always run on social consensus. If everyone agrees, we can change it," Green said. "That's true for Ethereum, Bitcoin or anything."
The exploit itself was messy. A bridge vulnerability allowed attackers to siphon tokens from Layer 2 environments, which were then deposited into lending protocols like Aave as collateral to borrow ETH. That ETH, according to investigators coordinating behind the scenes, was linked “beyond a reasonable doubt” to North Korean actors. But unlike most hacks, the funds weren’t immediately laundered. They sat still for two days. People waited and wondered what might happen next. As Coinage has covered in the past, it's not impossible for hackers to return funds, as one hacker once did in 2023 with $200 million. It's just extremely rare.
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