Arbitrum delegates are deliberating on releasing 30,765 ETH frozen after the rsETH exploit, but a lawyer representing victims of North Korean terrorism has intervened, stating they cannot do so. The frozen ether was stolen from restaked ETH holders during the Kelp DAO bridge exploit, reported as the largest DeFi hack of 2026.
A governance post by attorney Charles Gerstein serves as a restraining notice under New York law, representing three sets of judgment creditors with $877 million in claims against North Korea. The claims date back to the 1972 Lod Airport massacre, the 2000 abduction and killing of Reverend Kim Dong Shik, and the 2006 Israel-Hezbollah war, where North Korea was found to have supplied weapons and training. The plaintiffs won their cases, but North Korea has never paid, and the families have been searching for 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.
Arbitrum is involved because its Security Council froze the ETH, placing the funds under its control. The legal tool used is a New York enforcement mechanism that allows creditors to freeze assets by serving a restraining notice.
The complication lies in Arbitrum DAO's unclear legal status, making it uncertain who would be held responsible if the notice is ignored. The filing has drawn pushback, with some arguing that the ETH belongs to the original rsETH depositors and that blocking the recovery effort would shift the cost of North Korea's debt onto a different set of victims. Delegates must now choose between the victims of the hack and the families with decades-old judgments against North Korea.