Arbitrum DAO faces US legal battles over frozen Ether from North Korea-linked hacks

The decentralized finance platform Aave has filed a lawsuit in the Southern District of New York seeking to lift an injunction that blocks the transfer of roughly $71 million in frozen Ether related to the rsETH attack on Arbitrum. Aave argues that “the frozen ETH belongs entirely to unrelated third‑party users” and that the assets should not be treated as North Korean property.

Separately, U.S. law firm Gerstein Harrow LLP filed a restraining notice with the same court to prevent the Arbitrum DAO from moving about 30,766 Ether (about $73 million) frozen after the Kelp exploit. The firm claims its clients are owed $877 million in compensation from prior judgments against North Korea and describes the stolen Ether as “property” in which the DPRK has a stake. Both actions could delay the restitution of funds to victims and set precedents for how frozen crypto assets are handled in future DeFi crises.