North Korea Terrorism Creditors Target Arbitrum’s Frozen ETH

The dispute arose from an April 18, 2026 exploit involving Kelp DAO’s rsETH, when attackers minted unbacked tokens and used them as collateral on Aave to borrow roughly $230 million in assets. Arbitrum’s Security Council froze 30,765 ETH linked to the attack. The case matters beyond the recovery itself: it tests whether assets taken in a DeFi exploit remain the victims’ property or can be treated as North Korean property available to satisfy long-standing U.S. terrorism judgments.

Gerstein Harrow LLP, acting for three groups of judgment creditors, served Arbitrum DAO with a New York restraining notice on April 30, seeking about $877 million in unpaid awards against North Korea. On May 8, U.S. District Judge Margaret Garnett in Manhattan allowed roughly $71 million of ETH to be moved to a wallet controlled by Aave LLC while preserving the creditors’ claim. More than 90% of Arbitrum delegates backed the recovery plan in a non-binding Snapshot vote; a binding onchain vote is still required, and Aave cannot freely deploy the funds.