Schwartz Compares Arbitrum's Emergency to Bitcoin's 2010 Bug
News By Alex Dovbnya Wed, 22/04/2026 - 7:35 Ripple CTO David Schwartz has defended the Arbitrum Security Council’s controversial decision to freeze over 30,000 ETH tied to the KelpDAO exploit. Advertisement
Ripple CTO Emeritus David Schwartz has defended the Arbitrum Security Council’s recent emergency intervention.
AdvertisementIn fact, he has compared it to one of the most famous existential crises in Bitcoin’s early history.
After the recent KelpDAO exploit, the Arbitrum Security Council decided to freeze the 30,766 ETH held by the attacker.
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The council was able to secure the funds without impacting the broader network state.
AdvertisementThe intervention was immediately met with intense pushback from those who are concerned about centralization.
The concern is that the security council can force changes onto the network without requiring individual node operators to actively download and accept a new software fork.
"The Security council has the power to upgrade the smart contract on the L1, effectively a coercion mechanism that has absolutely nothing to do with decentralisation," Nakamoto argued.
AdvertisementThe 2010 value overflow incident
Schwartz, however, does not believe that Arbitrum's actions represent a departure from decentralized principles.
Schwartz pointed to the incident when an attacker was allowed to mint over 184 billion BTC out of thin air (which was known as the “value overflow incident”).
Satoshi Nakamoto and early Bitcoin developers released a new patch, and the community of node operators effectively rewound the blockchain's history. "This is exactly what bitcoin did in response to the overflow incident," Schwartz explained on X. "Node operators disagreed with the view of the shared database that the existing consensus rules were showing them. So they opted to both change those rules and rewind the system's history."
The Arbitrum community was faced with a network state they found illegitimate, and the council acted to rectify it. "Nothing compelled anyone to honor the view of the blockchain the then current consensus rules produced," he noted. "This is how decentralization works."
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