The Arbitrum DAO governance approved yesterday, May 7, 2026, the release of 30,765.67 ETH (valued at more than $70 million at the current price) that had been frozen since April 21 following the hack of the Kelp DAO protocol.
This proposal received the support of 90.96% of the votes castwith the goal of transferring the assets to a recovery effort coordinated by Aave Labs, KelpDAO and other ecosystem partners.
The funds, which should be released towards the end of May, will go to a multi-signature wallet (Gnosis Safe 3 of 4) to try to restore rsETH backupwhich presents a deficit of approximately 76,127 units after the vulnerability exploited on April 18. According to the approved text, returning this ETH will reduce direct damage to users and borrowers of Aave V3’s Arbitrum market.
Despite the governance mandate, a court order issued on May 1, 2026 by the United States District Court for the Southern District of New York could hinder the process. In the framework of the case «Han Kim et al v. Democratic People’s Republic of Korea”, Judge Margaret M. Garnett authorized the use of alternative means to notify Arbitrum DAO as a “possible garnishee third party” (garnishee) of these assets.
The court order is based on:
- The group of attackers who took possession of the tokens on April 19, 2026 were identified as North Korean hackers.
- The plaintiffs seek to retain and eventually take possession of those ETH to satisfy unpaid court judgments against the North Korean government.
- The court determined that Arbitrum DAO can be legally treated as a partnership (general partnership) for legal notification purposes.
This legal situation poses a direct collision – still to be resolved – between the will of the Arbitrum community regarding the frozen ETH and the intention of the US judicial system to confiscate funds linked to sanctioned entities.