Law firm files ETH ban notice for kelp mining
A US law firm has filed a restraining order against transfers of frozen ether from kelp exploitation, arguing that its clients are owed more than $877 million in compensation and damages to North Korea.
US law firm attorney Charlie Gerstein posted on the Arbitrum DAO forum on Friday that the New York District Court has signed a restraining order and three death warrants, preventing the DAO from operating Ether under the threat of contempt of court.
The law firm argued that its clients are owed $877 million in compensatory and punitive damages and interest after winning back-to-back judgments against North Korea in various U.S. courts in 2010, 2015 and 2016.
He also argued that the clients had a claim to DPRK property. Gerstein said in the announcement of the ban that the stolen ether is “property”, which the DPRK has a stake in because the hacker group is connected to the country.
The cold weather means people affected by kelp exploitation will have to wait longer to get their money. This is not the first time the organization has tried to claim stolen cryptocurrency.
Kelp Dao suffered a $292 million hack on April 18, believed to be carried out by TraderTraitor, a subsidiary of the North Korean government-backed hacking group Alazarus Group.
Days later, Arbitrum's Security Council took urgent action to seize 30,766 Ether (ETH), worth more than $73 million, in a wallet linked to kelp mining.
Charlie Gerstein, an attorney at Gerstein Harrow, has issued a restraining order seeking to prevent Arbitrum from moving the DAO frozen Ether. Source: Arbitrum Dao
Financial support is provided for Kelp victims
Aave Labs proposed on April 25 that Arbitrum DAO freed $73 million in Ether linked to the Kelp DAO attack and directed those funds to “DeFi United,” a fund to restore rETH and compensate its holders.
The Arbitrum DAO member said that if the law firm's action under Zeptimus's hand is successful, DPRK debt will not be transferred to Kelp DAO victims.
“Your clients' losses are real, and the DPRK must answer for them. But the solution the sanctions notice calls for will shift the cost of the DPRK's debt onto a set of looted victims by preventing the return of stolen funds to their owners. This will exacerbate, not repair, the original damage,” he said.
Gerstein Harrow has made similar claims before
Gerstein Harrow has filed similar cases in the past, arguing that clients have claims for funds stolen by the DPRK and blocked by crypto companies. In February, the firm laid claim to the Tether blocked funds stolen in the 2023 Heco Bridge hack.
Related: North Korean hackers used AI-enabled social engineering in Zerion attack
He also filed class-action lawsuits against several DAOs. At the same time, onchain sleuth ZachXBT accused the law firm of using its research in court documents to claim $1.5 billion in Bybit hack money.
The law firm has three live lawsuits against DAOs on its website. Source: Gerstein Harrow
Actors with ties to North Korea stole at least $578 million in major incidents in April and have been linked to several of the industry's biggest data breaches, including the Bybit exploit.
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