Arbitrum delegates are currently deliberating whether to release 30,765 ETH, which was frozen following last month’s rsETH exploit, into a coordinated recovery initiative. However, an attorney representing victims of North Korean terrorism has entered the discussion and opposed this action.
The ether was siphoned from holders of restaked ETH (a representative token for locked ETH on another platform) during an April 19 Kelp DAO bridge hack, reportedly the largest DeFi breach of 2026 according to CoinDesk.
A governance post by attorney Charles Gerstein acts as a restraining notice under New York law on behalf of three groups of judgment creditors with around $877 million in claims against North Korea. These claims date back decades: one from the 1972 Lod Airport massacre in Israel, where gunmen backed by North Korea killed 26 people; another involves Reverend Kim Dong Shik, kidnapped and later murdered in DPRK custody near China’s border in 2000; a third relates to the 2006 Israel-Hezbollah war, with a federal judge finding Pyongyang had supplied weapons and training for rocket attacks.
Despite winning their cases, North Korea has not made any payments. The families have long sought any legally accessible North Korean assets to satisfy these judgments. Gerstein’s filing suggests that as U.S. authorities associate the Lazarus Group, linked to the hack, with the North Korean state, the 30,765 ETH frozen by Arbitrum’s Security Council qualifies as North Korean property under U.S. enforcement law.
If accepted by a court, this would give families with unpaid judgments a senior legal claim on these funds over the original rsETH depositors. After the rsETH exploit, Arbitrum’s Security Council froze 30,765 ETH at a specific network address, bringing it under their control. Gerstein’s filing references three cases: Calderon-Cardona, Kim, and Kaplan, with writs of execution totaling around $877 million.
The legal mechanism employed is CPLR §5222(b), which allows creditors to freeze assets by serving a restraining notice without needing a new court order, though the target can contest it later. Once served, asset movement is barred for up to a year or until judgment resolution; non-compliance may result in contempt of court charges.
Arbitrum DAO’s ambiguous legal status complicates matters, as risk does not clearly attach to