U.S. law firm seeks to block transfer of frozen ETH from Kelp attack, claims over $877 million in damages

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On May 4, U.S. law firm Gerstein Harrow LLP filed a motion to prevent Arbitrum DAO from transferring frozen ETH linked to the Kelp attack, citing CFTC regulations. The firm asserts $877 million in damages based on default judgments against North Korea. The Kelp attack on April 18 resulted in a $292 million loss, with 30,766 ETH frozen. Some argue this action delays compensation for victims and shifts liability for risk-on assets. Aave Labs has proposed using the funds to establish a compensation pool. Gerstein Harrow has pursued similar claims in prior incidents. The case could set precedents for DAO asset governance and cross-jurisdictional rights.

BlockBeats report, on May 4, the U.S. law firm Gerstein Harrow LLP applied to the court for an injunction seeking to prevent the Arbitrum DAO from transferring frozen Ethereum assets related to the Kelp attack. The law firm stated that its clients have obtained default judgments in three cases involving North Korea, totaling approximately $877 million in damages, including punitive damages and interest, and asserted a claim to the relevant assets.


Previously, on April 18, Kelp DAO was attacked, suffering losses of approximately $292 million, and the incident is believed to be linked to the North Korean hacking group Lazarus Group. Subsequently, the Arbitrum Security Council urgently froze approximately 30,766 Ether (about $73 million).


The event has sparked controversy. Some community members believe that if the restriction order takes effect, it will delay the return of funds to affected users and shift the debt related to North Korea onto secondary victims. Previously, Aave Labs proposed unfreezing the funds and injecting them into a compensation fund to restore the damaged assets.


Notably, Gerstein Harrow has previously filed claims for assets stolen by North Korea-linked hackers and frozen by crypto platforms, including in the 2023 Heco Bridge incident. Industry analysts believe this case could set a precedent for the handling of DAO assets and the definition of cross-jurisdictional claim rights.

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