Arbitrum delegates are deliberating whether to release 30,765 ETH frozen after the rsETH exploit as part of a coordinated recovery effort. However, a lawyer representing victims of North Korean terrorism has intervened, stating that the funds cannot be released. The lawyer, Charles Gerstein, has filed a restraining notice under New York law on behalf of three sets of judgment creditors with approximately $877 million in claims against North Korea. The claims date back decades, including the 1972 Lod Airport massacre and the abduction and killing of Reverend Kim Dong Shik in 2000.
The plaintiffs won their cases, but North Korea has never paid, and the families have been searching for any North Korean assets to seize. Gerstein's filing argues that the 30,765 ETH frozen by Arbitrum's Security Council qualifies as North Korean property under U.S.
enforcement law, giving the families a senior legal claim on the funds. The legal mechanism being used is a New York enforcement tool that allows creditors to freeze assets by serving a restraining notice.
The complication lies in the fact that Arbitrum DAO is not a company with clear legal status, making it unclear who would be responsible if the court ultimately decides to freeze the assets. The filing has drawn pushback from delegates, with some arguing that the legal premise is backwards and that the funds belong to the original rsETH depositors. The delegates are now faced with a choice between two sets of victims: the Aave depositors with stuck positions and the families behind the decades-old judgments against North Korea.