A lawyer representing families who hold federal court judgments against North Korea has intervened in Arbitrum DAO’s governance process, filing a New York restraining notice that could block the release of 30,765 ETH frozen following last month’s rsETH bridge exploit. The supporting evidence appears in delegates are in the process of weighing.
Attorney Charles Gerstein posted the notice directly to the Arbitrum Foundation forum, naming the DAO as a garnishee in three separate federal enforcement actions.
The combined judgments behind the filing total roughly $877 million against the Democratic People’s Republic of Korea. Gerstein argues that because U.S. authorities have publicly linked the Lazarus Group to the April 19 Kelp DAO bridge exploit, the drained funds constitute seizable DPRK-linked property under existing U.S. law.
Three Decades of Unpaid Judgments Behind the Claim
The creditors Gerstein represents carry some of the most long-standing unresolved terrorism claims in U.S. federal courts.
One stems from the 1972 Lod Airport massacre in Israel, where gunmen killed 26 people including 17 Puerto Rican pilgrims in an attack a U.S. court later found to have been supported by Pyongyang.
A second involves Reverend Kim Dong Shik, a U.S. permanent resident abducted near the China border in 2000 and subsequently killed in DPRK custody.
The third creditor set traces its claims to the 2006 Israel-Hezbollah war, where a federal judge ruled that North Korea had supplied weapons and training used in rocket attacks against Israeli civilians. All three plaintiff groups won their cases in U.S.
courts. North Korea has never paid a dollar of any judgment, and sovereign asset seizures against the country have remained largely impossible through conventional legal channels.
With traditional enforcement routes exhausted, the families have spent years tracking any assets that could plausibly be classified as North Korean property. The alleged Lazarus Group connection to the rsETH exploit gave their legal team an opening in an unexpected venue: a blockchain governance forum.
Arbitrum DAO Caught Between DeFi Victims and Terror Claimants
Arbitrum delegates had already been weighing a proposal to release the frozen ETH into a coordinated recovery effort for rsETH depositors who lost funds in the April 19 exploit, which stands as the largest DeFi hack recorded so far in 2026. The Kelp DAO bridge attack drained restaked ETH, a representative token of ETH locked on other platforms for fixed yields, leaving thousands of depositors with unrecovered losses.
Gerstein’s notice warns that any party controlling or transferring the frozen assets could face contempt of court if the funds are moved while the restraining notice is active. That language has added legal risk to what delegates had framed as a straightforward victim compensation vote.
Several Arbitrum delegates have pushed back, arguing the ETH is stolen property that rightfully belongs to rsETH depositors rather than a foreign state or its creditors.
The framing sets up a direct conflict between two groups of victims: recent DeFi users who lost funds weeks ago and families who have pursued justice for geopolitical violence stretching back more than 50 years.
The DAO has not yet announced a timeline for resolving the governance vote, and the legal enforceability of a New York restraining notice against a decentralized autonomous organization remains untested in U.S. courts.
The outcome could set a precedent for how on-chain frozen assets interact with traditional civil enforcement actions going forward.
Not Financial Advice: This article is for informational purposes only. Cryptocurrency investments carry significant risk. Always conduct your own research before investing.
