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A US Law Firm Just Stopped a DAO From Returning $71M to Crypto Hack Victims
A US law firm, Gerstein Harrow LLP, has officially blocked Arbitrum DAO from returning 30,766 ETH (~$71M) frozen after the Kelp DAO exploit.
What's Happening:
🔹 NY federal court issued a restraining notice + 3 writs of execution on May 1
🔹 Firm represents families with $877M+ unpaid judgments against North Korea (Rev. Kim Dong-shik case, Hezbollah attacks, 1972 Lod Airport massacre)
🔹 They argue the frozen ETH = DPRK property under FSIA & Terrorism Risk Insurance Act
🔹 Arbitrum DAO vote (99% in favor) to redirect funds to Aave-led recovery is now stalled
Why It Matters:
✅ First major test of DAO governance vs US courts
✅ Real Kelp hack victims may have to wait longer for recovery
✅ DAO voters could face personal legal liability
✅ ZachXBT proposed a community DAO to counter the law firm
Lazarus Group has stolen $6B+ in crypto since 2017, 76% of all 2026 hack losses. This case may set the precedent for how courts treat hacked crypto frozen by DAOs.
This isn't just a hack anymore, it's a cross-border legal war over crypto ownership, sanctions, and decentralization itself.