Schwartz: "Arbitrum Emergency Freeze is on par with Bitcoin's 2010 crisis"

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Amid growing centralization controversy surrounding Arbitrum's emergency freeze of 37,666 ETH, David Schwartz has directly refuted it, likening it to Bitcoin's (BTC) most infamous crisis in history.

According to U.Today, a cryptocurrency specialized media outlet, on April 22 (local time), David Schwartz, former CTO of Ripple, publicly defended the recent emergency intervention by the Arbitrum Security Council. The report states that the Security Council recently froze 37,666 ETH linked to an attacker after the KelpDAO exploit, securing the funds without affecting the overall network state.

This action immediately drew strong backlash. Critics raised concerns that the Security Council could force changes on the network without requiring individual node operators to download and accept a new software fork directly. According to the article, a critic named Nakamoto argued, “The Security Council has the authority to upgrade smart contracts on L1, which is a coercive mechanism completely unrelated to decentralization.”

Schwartz countered that Arbitrum's response was not an instance of undermining decentralization principles. He referred to the 'value overflow incident' in 2010 when an attacker minted over 184 billion Bitcoins out of thin air. In this regard, he explained, "Satoshi Nakamoto and early developers released a new patch at the time, and the community's node operators effectively rewound the blockchain record."

Schwartz stated on X (formerly Twitter), “This is exactly how Bitcoin responded to the overflow incident.” He continued, “Node operators disagreed with the state of the shared database as presented by the existing consensus rules, and chose to change the rules and rewind the system's history.” He then asserted that the Arbitrum community also faced a network state they deemed illegitimate, and the Security Council moved to correct it.

He further emphasized, “There was no reason anyone had to respect the blockchain state produced by the consensus rules at the time,” and “This is how decentralization works.” These remarks are interpreted as an explanation that Arbitrum's emergency freeze was not merely an exercise of administrative authority, but rather a process by which the community re-established legitimacy.

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