A U.S. attorney is attempting to claim ETH frozen by Arbitrum following the Kelp DAO exploit — on behalf of victims of North Korean state hackers from prior incidents.
A lawyer representing multiple past victims of North Korean state-sponsored hackers is attempting to claim the Kelp exploit-linked ETH that Arbitrum froze last month.
U.S.-based attorney Charles Gerstein of Gerstein Harrow LLP posted directly to the Arbitrum governance forum on May 1, serving the Arbitrum DAO with a restraining notice and three writs of execution authorized by the U.S. District Court for the Southern District of New York. The legal action targets over 30,700 ETH frozen on the Arbitrum One blockchain following the April 18 exploit of a LayerZero bridge on DeFi protocol Kelp, attributed to a North Korean state-backed hacking group.
The restraining notice, dated April 30, points to three U.S. federal court judgments won by victims against North Korea — in Kim v. DPRK (2015), Kaplan et al. v. DPRK (2016), and Calderon-Cardona v. DPRK (2010) — that together total hundreds of millions of dollars and remain unpaid.
Gerstein argues that the frozen ETH on Arbitrum is effectively North Korean state property, controlled through its Lazarus Group hacking arm, and should be seized to pay the past victims that he represents. The court order authorizing Gerstein to serve Arbitrum DAO was filed on May 1. The restraining notice posted to Arbitrum DAO’s forum warns that non-compliance is “punishable as a contempt of court.”
Arbitrum has yet to officially acknowledge the restraining notice.
The Arbitrum Security Council took the controversial step of freezing the exploit proceeds on April 20, as The Defiant reported at the time.
According to multiple reports on X, this is not the law firm’s first attempt at this playbook. In an X post Sunday evening, on-chain security expert Taylor Monahan, known as Tay on X, documented Gerstein Harrow’s past efforts to claim frozen USDT linked to the 2023 Huobi/HTX/HECO bridge hack — also attributed to North Korea — in a case where the U.S. government had already filed a separate forfeiture action expected to return funds to the original victims.
“Gerstein Harrow is a boutique piece of shit law firm that has a history of making people’s lives hell for their own financial benefit. They used to go after various DeFi and DAO things,” Tay, who is a member of the Arbitrum Security Council, summarized in the X thread.
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