A U.S. law firm has filed a legal notice to block the return of $73 million in frozen Ether from the Kelp DAO exploit. Gerstein Harrow LLP argues its clients, who hold $877 million in judgments against North Korea, have a claim to the funds, potentially delaying compensation for the hack’s victims.
A U.S. law firm has moved to prevent the return of over $73 million in Ether frozen after a major DeFi hack. Gerstein Harrow LLP filed a restraining notice approved by a New York court to block the Arbitrum DAO from moving the funds.
The firm represents clients who won default judgments against North Korea in 2010, 2015, and 2016. They are collectively owed over $877 million in compensatory and punitive damages, plus interest.
Lawyer Charlie Gerstein stated in a forum post that the stolen Ether constitutes property in which the DPRK has a stake. He argued this is because the hacker group TraderTraitor, a subgroup of the Lazarus Group, is affiliated with North Korea.
The Kelp DAO suffered a $292 million hack on April 18. Days later, the Arbitrum Security Council froze 30,766 Ether linked to the exploit.
An Aave Labs proposal had sought to unfreeze the funds for a victim compensation fund. An Arbitrum DAO member, Zeptimus, warned the law firm’s action would shift the DPRK’s debt onto the Kelp victims.
“Your clients’ losses are real and the DPRK should answer for them. But the remedy… shifts the cost of the DPRK’s debt onto a different set of victims who were themselves robbed,” they said.
Gerstein Harrow has a history of similar claims against frozen crypto assets. In February, the firm filed a claim against funds from the 2023 Heco Bridge hack frozen by Tether.
It has also filed class-action suits against multiple DAOs. Onchain sleuth ZachXBT accused the firm of using his research to stake a claim on funds from the $1.5 billion Bybit hack.
