TechFlow News, May 4: According to Cointelegraph, U.S. law firm Gerstein Harrow LLP filed an application with the U.S. District Court for the Southern District of New York seeking a preliminary injunction and three writs of execution to prevent the Arbitrum DAO from transferring 30,766 ETH (valued at approximately $73 million) frozen due to the Kelp vulnerability. The firm claims its clients obtained default judgments against North Korea in U.S. courts in 2010, 2015, and 2016, collectively entitling them to roughly $877 million in compensation. It argues that the stolen ETH constitutes North Korean-linked assets and should be applied toward satisfying those judgments.
Kelp DAO suffered a $292 million hack on April 18; the attacker was identified as TraderTraitor, a subgroup of the North Korean state-sponsored hacking group Lazarus Group. Aave Labs previously proposed unfreezing the affected funds and transferring them into the “DeFi United” fund to compensate rsETH holders. However, this legal action by Gerstein Harrow may significantly prolong the wait for victims to receive redress.
Members of the Arbitrum DAO community have criticized the move, arguing it shifts the burden of North Korean debt onto another group of victims, thereby exacerbating the original harm. Gerstein Harrow previously made similar claims regarding Tether’s freezing of funds in the 2023 Heco Bridge hack and has also been accused by on-chain investigator ZachXBT of citing his research to assert rights in the $1.5 billion Bybit theft case.
