Attorney emerges on Arbitrum DAO discussion boards requesting financial support for victims of long-standing North Korean terrorism.

Families with long-standing judgments against North Korea are attempting to claim 30,765 ETH that was frozen following last month’s rsETH exploit. They are citing purported connections between the incident and hacking groups associated with the DPRK, such as Lazarus, and have invoked a New York restraining notice that may prevent Arbitrum from releasing these funds.

What to know:

• A legal representative for victims of North Korean terrorism has issued a New York restraining notice to Arbitrum DAO, aiming to prevent the release of 30,765 ETH that remains frozen, asserting it is property associated with the DPRK.
• The submission identifies Arbitrum DAO as a garnishee in three federal enforcement proceedings linked to longstanding judgments totaling approximately $877 million against North Korea, cautioning that transferring the funds could expose those managing the assets to contempt of court.
• Some Arbitrum delegates contend that the ETH is stolen property that ought to be returned to rsETH depositors, framing the issue as a decision between compensating recent DeFi victims and addressing decades-old terrorism-related judgments against Pyongyang.

Arbitrum delegates are currently deliberating whether to release the 30,765 ETH that was frozen after the rsETH exploit into a coordinated recovery initiative. However, a lawyer representing North Korean terrorism victims intervened in the forum to assert that they should not proceed.

The ether was extracted from restaked ETH holders (a representative token of ETH locked on another platform for fixed yields) during the April 19 Kelp DAO bridge exploit, which CoinDesk previously reported as the largest DeFi hack of 2026.

The governance post, written by attorney Charles Gerstein, acts as a restraining notice under New York law on behalf of three groups of judgment creditors holding close to $877 million in claims against the Democratic People’s Republic of Korea.

The claims associated with this filing date back several decades. One originates from the 1972 Lod Airport massacre in Israel, where gunmen killed 26 individuals, including 17 Puerto Rican pilgrims, in an attack that a U.S. court later determined was supported by North Korea.

Another is related to Reverend Kim Dong Shik, a U.S. permanent resident abducted near the China border in 2000 and subsequently killed while in DPRK custody. A third claim pertains to the 2006 Israel-Hezbollah conflict, where a federal judge concluded that Pyongyang had provided weapons and training used in rocket assaults.

The plaintiffs succeeded in their cases, but North Korea has yet to make any payments. Given that seizing sovereign assets is practically unfeasible, the families have invested years searching for any North Korean properties they can legally claim to fulfill their judgments.

Gerstein’s submission argues that since U.S. authorities have associated the Lazarus Group, the hacking unit accountable for the exploit, with the North Korean state, the 30,765 ETH frozen by Arbitrum’s Security Council qualifies as North Korean property under U.S. enforcement legislation.

If the court accepts this perspective, the families with outstanding judgments would gain a primary legal claim over those funds, taking precedence over the rsETH depositors who initially owned them.

The involvement of Arbitrum is straightforward: following the rsETH exploit, its Security Council froze 30,765 ETH at a designated address on its network, effectively bringing the funds under its control. Gerstein’s filing references three underlying cases: Calderon-Cardona, Kim, and Kaplan, with execution writs totaling around $877 million.

The legal mechanism employed is CPLR §5222(b), a New York enforcement statute that permits creditors to freeze assets merely by serving a restraining notice, without the necessity of obtaining a new court order first, although the target has the right to contest it afterward.

Once served, the recipient is prohibited from moving the assets for a duration of up to one year or until the judgment is resolved. Ignoring the notice can result in contempt of court, categorized similarly to defying a judge’s order.

The complexity in this situation arises from the fact that Arbitrum DAO lacks a defined legal identity. Consequently, the risk does not directly attach to “the DAO,” but rather to whoever a court ultimately determines has control over the frozen ETH.

The filing and the legal rationale presented received pushback within the same forum thread. Delegate Zeptimus claimed the legal foundation is flawed, asserting that the ETH “is not property in which the DPRK has an ‘interest’… It’s stolen property,” and added that under fundamental property law “a thief acquires no title.”

From this perspective, the funds rightfully belong to the original rsETH depositors, and the proposed recovery initiative is not a redistribution but a return of assets to their legitimate owners. Zeptimus indicated that blocking that process “transfers the cost of the DPRK’s debt onto another group of victims who were also robbed.”

Delegates had been navigating a different set of trade-offs. Entropy Advisors advocated for a FOR vote, highlighting the daily interest burden faced by Aave users with stuck positions. Axia raised concerns regarding whether the Arbitrum Captive Insurance Product would cover delegates in case of complications.

Gerstein’s filing significantly intensifies that inquiry, as coverage for typical delegate liabilities is one matter, but exposure related to an active enforcement action is distinctly different.

What remains is a decision between victims. On one side are Aave depositors with positions they cannot liquidate. On the other are families holding decades-old judgments against North Korea, still striving to collect.