Leads are a key feature of the Arctic ice pack during the winter owing to their substantial contribution to the surface energy balance. According to the present understanding, enhanced heat and moisture fluxes from high lead concentrations tend to produce more boundary layer clouds. However, described here in our composite analyses of diverse surface- and satellite-based observations, we find that abundant boundary layer clouds are associated with low lead flux periods, while fewer boundary layer clouds are observed for high lead flux periods. Motivated by these counterintuitive results, we conducted three-dimensional cloud-resolving simulations to investigate the underlying physics. We find that newly frozen leads with large sensible heat flux but low latent heat flux tend to dissipate low clouds. This finding indicates that the observed high lead fractions likely consist of mostly newly frozen leads that reduce any pre-existing low-level cloudiness, which in turn decreases downwelling infrared flux and accelerates the freezing of sea ice.