A group of plaintiffs linked to another case against North Korea is claiming the assets.
The Arbitrum Security Council has been prohibited from interacting with 30,000 ETH that was frozen following a hacker attack on Kelp. This was stated in a ruling by the U.S. District Court for the Southern District of New York.
Source: court documents.The frozen funds are being claimed by victims of North Korean terrorism, who suffered in kidnapping incidents in 2015.
Among the plaintiffs are Han Kim and Yong Sok Kim, U.S. citizens whose relative died as a result of those incidents. They successfully sued Pyongyang for over $300 million in compensation.
The DAO Arbitrum is listed as the temporary owner of the funds in the lawsuit. The organization has been classified as a general partnership.
According to the order, which still needs to be officially delivered to authorized representatives of Arbitrum, the organization is prohibited from moving or interacting with the frozen assets until further court notice.
A vote to transfer the 30,000 ETH to the DeFi United fund began almost simultaneously with the issuance of the ruling. The discussion will continue until May 7, and no suspension has been reported yet. At the time of writing, over 99% of votes were in favor.
Source: snapshot.org.Document Assessment
Attorney Gabriel Shapiro reviewed the documents and stated that the ruling is legitimate, not theoretical. The plaintiffs received court approval under special asset seizure laws, resulting in the DAO losing the right to unilaterally redirect the assets.
“Arbitrum currently has no right to do anything with the Kelp funds until a hearing on their sale. […] They must participate in the legal proceedings rather than making decisions independently,” the lawyer added.
According to ImperiumPaper, head of the economic department at MegaETH, the court order significantly complicates the return of funds to the affected protocol.
This is why the Arbitrum Security Council was not kind to the DAO. Lawyers for DPRK victims have now found a large pile of DPRK assets to seize to make good on a 2015 judgement against DPRK.
— PaperImperium (@ImperiumPaper) May 2, 2026
It appears a restraining order prohibiting the transfer of funds will complicate the… pic.twitter.com/P335TYlF71
He noted that the case is being handled by lawyers from Gerstein-Harrow, a firm known for lawsuits against DAOs and other entities in the DeFi sector.
“This is a predatory American law firm with a strategy of pure evil. Every time after a hack and freezing of crypto assets, the Lazarus Group comes in, and these clowns claim they have a claim on behalf of supposedly other DPRK victims from 26 years ago, which has nothing to do with the case,” noted on-chain investigator ZachXBT.
Recall that in April, Arbitrum council member Griff Green called for a boycott of USDC due to its weak security system.