Arbitrum DAO Served Restraining Notice Over Frozen ETH from Kelp DAO Exploit

A lawyer representing victims of North Korean terrorism has served Arbitrum DAO with a New York restraining notice, seeking to block the release of 30,765 ETH frozen after last month's rsETH exploit. The filing, authored by attorney Charles Gerstein, names Arbitrum DAO as a garnishee in three federal enforcement actions tied to judgments totaling about $877 million against North Korea.

CoinDesk reported that the ether was drained from restaked ETH holders during the April 19 Kelp DAO bridge exploit, marking the largest DeFi hack of 2026.

Families holding these decades-old judgments against North Korea are attempting to seize the frozen funds, invoking alleged links between the attack and DPRK-linked hacking groups such as Lazarus. The restraining notice, served under New York law, could prevent Arbitrum from releasing the 30,765 ETH.

Gerstein's governance post on the Arbitrum DAO forums acts as the formal notice on behalf of three sets of judgment creditors.

The exploit occurred last month, with Arbitrum's Security Council freezing the 30,765 ETH at a specific address on its network following the incident. The April 19 Kelp DAO bridge exploit involved the draining of ether from restaked ETH holders, who held representative tokens locked on another platform for fixed yields.

CoinDesk described it as the largest DeFi hack of 2026, with the frozen assets now at the center of the legal dispute.

One judgment stems from the 1972 Lod Airport massacre in Israel, where gunmen killed 26 people, including 17 Puerto Rican pilgrims. S. court found the attack to have been supported by North Korea.

U.S. permanent resident abducted near the China border in 2000 and killed in DPRK custody. A third judgment ties to the 2006 Israel-Hezbollah war, where a federal judge found Pyongyang supplied weapons and training used in rocket attacks.

The plaintiffs in these cases won their judgments, but North Korea has never paid, leading the families to search for any DPRK-linked property to collect against. S. S.

Enforcement law. The legal tool used is CPLR §5222(b), a New York enforcement mechanism that allows creditors to freeze assets by serving a restraining notice without a new court order. Once served, the recipient is barred from moving the assets for up to a year or until the judgment is resolved, with violations potentially leading to contempt of court.

The filing warns that moving the funds could expose those controlling the assets to such penalties. Inside the Arbitrum DAO forum thread, the filing drew pushback. Other delegates had been discussing related trade-offs before the notice.

Entropy Advisors urged a vote to release the funds, citing daily interest costs to Aave users with stuck positions. Axia raised questions about whether the Arbitrum Captive Insurance Product would cover delegates if issues arose, a concern now heightened by the live enforcement action.