Hassan Maishera
TL;DR
- Arbitrum DAO voted to release the frozen $70 million worth of ETH to the DeFi United initiative.
- However, legal hurdles loom for the release of the funds.
Arbitrum DAO Approves $70 Million ETH Release for Kelp DAO Recovery
The Arbitrum DAO has approved the release of 30,765.6 ETH (roughly $70 million) to the DeFi United initiative, which was formed in response to the $292 million exploit on Kelp DAO last month.
The release was approved with overwhelming support, securing 90.96% of the voting power. This makes Arbitrum the largest donor to DeFi United.
The funds were frozen by the Arbitrum Security Council following an April 18 attack on Kelp DAO, where North Korea's Lazarus Group is suspected to have exploited a vulnerability in an Omnichain Fungible Token (OFT) bridge.
The attacker drained 116,500 rsETH, which was subsequently moved to Arbitrum and frozen.
Despite the DAO's approval, the release of the funds may face legal complications.
A court order issued on May 1 restricts Arbitrum DAO from transferring the ETH, as multiple plaintiffs with claims against North Korea's terrorism judgments seek restitution from the frozen assets.
Aave LLC has filed an emergency motion to challenge the court order, asserting that temporary possession of stolen assets does not imply ownership.
In the meantime, DeFi United continues its efforts to mitigate the damage caused by the exploit, with contributions from Consensys, Mantle, and LayerZero.
