Arbitrum DAO Fund Recovery Halted by US Court Ruling

A recent development in the US court system has put Arbitrum DAO's efforts to recover frozen assets tied to the Kelp DAO hack on hold. A restraining notice approved by the US District Court for the Southern District of New York restricts movement of around 30,766 ETH (worth approximately $71.1 million) that were frozen in connection with the case.

The frozen assets were linked to the roughly $292 million Kelp DAO hack in April. The Lazarus Group, a hacking organization associated with North Korea, was previously identified as the attacker. Plaintiffs holding unpaid judgments related to North Korea argued that the funds were connected to Pyongyang and claimed a right to seize them.

Despite over 99% support for a proposal led by Aave to transfer the frozen ETH to the DeFi United recovery fund to restore rsETH backing, concerns about personal liability for DAO voters remain. The lawsuit has sparked debate among industry participants, with some arguing that an automated recovery contract should be used instead of moving the funds directly.