Creditors target Arbitrum's ETH linked to North Korean hackers.
- Frozen ETH Arbitrum enters international legal dispute
- North Korean creditors target funds linked to Lazarus.
- DeFi United voting faces legal risk over compensation.
A federal court in New York has added uncertainty to Arbitrum DAO's plan to compensate victims following last month's $292 million attack on Kelp DAO. The dispute revolves around 30.766 ETH, valued at approximately $71 million, currently frozen by the network's Security Council.
On May 1st, creditor lawyers notified Arbitrum DAO of a court order preventing the movement of these funds. The freeze was communicated through a community forum, following authorization from the U.S. District Court for the Southern District of New York.
The plaintiffs have no direct connection to the Kelp DAO attack. They represent victims of older cases involving North Korea, with court rulings that have not yet been enforced. Their argument states that the ETH assets allegedly stolen by the Lazarus Group are property linked to the North Korean regime.
The lawsuit was filed by the law firm Gerstein Harrow LLP on behalf of American citizens connected to the case of Reverend Kim Dong-shik, who was kidnapped and killed by North Korean agents. This lawsuit alone resulted in a settlement of approximately US$330 million. Adding other cited cases, the total exceeds US$877 million, not including accrued interest.
The legal basis involves US laws that allow the seizure of assets from countries classified as state sponsors of terrorism. The lawyers argue that groups like Lazarus act as an extension of the North Korean state, which would justify freezing their assets.
Meanwhile, the Arbitrum community continues voting on the DeFi United proposal, which began on April 30th. The plan, supported by entities such as Aave Labs and other platforms, envisions using the frozen funds to restore the backing of the rsETH token.
Over 99% of the votes are in favor so far. The proposal includes transferring the funds to a multi-sig portfolio, managed by ecosystem participants, with a focus on recovering losses.
The measure, however, faces criticism in light of the new court order. Investigator ZachXBT commented: "This is a predatory American law firm with a purely malicious strategy."
The developer banteg argued that the DAO could ignore the decision, claiming that the funds have a proven origin and belong to the direct victims of the attack.
The case raises questions about the individual responsibility of DAO participants and creates a relevant precedent for disputes involving tracked cryptocurrencies between hackers and international lenders.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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