Court Blocks Access to Frozen Funds
A federal court in New York has ordered a halt on the movement of 30,766 ETH, roughly $71 million, that had previously been secured by Arbitrum following the Kelp DAO hack.
The twist? Lawyers representing victims of North Korea-related attacks claim those funds may be tied to the country and should be used to cover unpaid court judgments.
Claims Point to North Korea Link
The legal team argues that the stolen assets were handled by the Lazarus Group, a hacking organization long associated with North Korea. If that connection holds, the ETH could legally be treated as state-linked property.
Their case combines multiple rulings against North Korea, with total claims exceeding $877 million.
Arbitrum’s Original Plan Now in Question
Before the court order, Arbitrum had already taken action. Its Security Council moved the funds into a controlled wallet after identifying suspicious activity tied to the exploit.
At the same time, the DAO launched a vote to decide whether the ETH should be redirected to help recover losses from the attack. The proposal had overwhelming support, but the legal freeze now puts that plan on hold.
What Happens Next?
With both a recovery plan and a court claim targeting the same funds, Arbitrum is stuck in the middle.
What started as a straightforward effort to recover stolen assets has turned into a legal standoff, and the DAO’s next move will likely depend on how the courts decide to handle the claims.
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