Judge Permits Arbitrum DAO to Vote on Transferring $71M in ETH Linked to North Korea-Backed Hack

A Manhattan federal judge on May 8, 2026, modified a prior restraining notice served on Arbitrum DAO, allowing its governance to vote onchain to transfer $71 million in ETH to an Aave-controlled wallet. S. time, shields anyone who initiates, votes on or participates in the transfer from liability under the restraining notice.

The frozen ETH, which sat on Arbitrum, is tied to a North Korea-linked exploit on rsETH that occurred in April 2026. Arbitrum delegates conducted an off-chain Snapshot temperature check in which they overwhelmingly signaled support for returning the frozen ETH as part of Aave’s recovery plan. Any actual transfer of the ETH still requires a separate binding onchain governance vote.

The ruling follows attorney Charles Gerstein's argument that the assets could be seized because the exploit has been widely attributed to Lazarus Group, which is supported by North Korea. Gerstein represents families holding roughly $877 million in unpaid terrorism judgments against North Korea.

CoinDesk reported that the order preserves the legal freeze, which follows the assets as terrorism plaintiffs continue their claim.

The decision forms part of a broader push by terrorism judgment creditors to seize North Korea-linked crypto assets. Terrorism judgment creditors filed a separate lawsuit in January 2026 against Railgun DAO and Digital Currency Group. The suit alleges that Railgun DAO allowed North Korean actors to move funds that should have been frozen.

5 billion Bybit exploit. In March 2026 the plaintiffs asked a Washington federal court clerk to enter default against Railgun DAO. Their complaint names Digital Currency Group, alleging its $10 million purchase of Railgun governance tokens in 2022 made it a participant in the DAO’s governance and economics.

U.S. government had sought to seize through a forfeiture motion. The legal freeze follows the assets even as Arbitrum governance prepares to act.

Judge Margaret Garnett's order resolves an immediate standoff that had threatened to derail the coordinated DeFi recovery effort. The $71 million in ETH remains subject to the ongoing claims by the terrorism judgment creditors.