Canton Network Offers Fund Freeze Powers After Kelp Hack
Canton Network, Digital Asset's permissioned blockchain, offers institutions guardrails against bad actors—including fund freeze powers similar to what Arbitrum deployed after the Kelp DAO hack.
Key Takeaway
Institutions demand fund freeze powers that pure DeFi can't offer—Canton Network builds that control into the rails.
Digital Asset CEO Yuval Rooz defended Arbitrum's decision to freeze ₱4.36 billion ($71 million) stolen from Kelp DAO, arguing institutions need those exact powers to meet their fiduciary duty.
The Kelp DAO hack drained ₱17.8 billion ($290 million) before Arbitrum's 12-member security council intervened to lock down a chunk of the stolen funds. Rooz said that kind of control isn't a weakness—it's a feature institutions require. He told Decrypt that traditional organizations have to make sure bad actors cannot engage with their systems, and nobody should call that a bad thing.
Canton Network, which debuted in 2024, is Digital Asset's answer to DeFi's security mess. The blockchain is public but permissioned, letting institutions set safety parameters that would be table stakes for consumer-facing applications. Rooz acknowledged Canton isn't a silver bullet for DeFi's problems, but he pushed back against the idea that total freedom should come with zero risk.
North Korean hacking groups have stolen ₱368.31 billion ($6 billion) in crypto since 2017, according to TRM Labs. Stablecoin issuers like Tether have worked with authorities to freeze illicit funds, while Circle has stated it won't lock down USDC without a court order. Arbitrum's manual intervention sits somewhere in between—faster than courts, more centralized than Ethereum or Solana.
Digital Asset partnered with DTCC to tokenize U.S. Treasury securities on Canton Network using DTCC's ComposerX, demonstrating how Canton's guardrails appeal to regulated institutions handling traditional assets like those slated for 2026 deployment.
This article was written based on reporting from Decrypt.
