The law firm Gerstein Harrow LLP has blocked the transfer of 30,766 ETH from Arbitrum DAO to victims of the Kelp DAO hack, issuing an arbitration injunction against Arbitrum. The firm claims that its clients are entitled to these funds because they hold judgments for debt recovery from North Korea totaling over $877 million, and the Kelp DAO hack is allegedly linked to North Korean hackers.
Aave has filed an emergency motion in federal court in New York demanding the injunction be lifted. The main argument: the thief does not acquire legal ownership of the stolen assets. Additionally, Aave points out that North Korea’s involvement in the hack is only alleged and remains unproven, and the opposing party’s legal reasoning “contradicts common sense and the law.”
According to Aave’s lawyers, the freeze is causing “irreparable harm” to the protocol, its users, and the entire DeFi ecosystem. If the court cannot immediately overturn the injunction, Aave demands that Gerstein Harrow post a bond of $300 million to maintain the restriction. The Arbitrum DAO vote on transferring the funds concludes on May 7, and the judge has yet to issue a ruling.