Arbitrum approves $71 Million ETH release despite U.S. seizure fight
Arbitrum delegates approved the release of $71 million in ether frozen after last months Lazarus-linked rsETH exploit, setting up a direct clash between decentralized governance and an active U.S. court fight over who owns the funds. The on-chain vote, which closed Friday afternoon Hong Kong time with more than 90% support, authorizes the release of 30,765 ETH frozen by Arbitrums Security Council after the April 18 exploit, when attackers used unbacked rsETH tokens as collateral on Aave to borrow roughly $230 million in ETH from the protocol. The funds are earmarked for a coordinated industry recovery effort led by Aave, KelpDAO, LayerZero, EtherFi and Compound, aimed at making affected users whole. But the frozen ether is also at the center of an escalating legal dispute in Manhattan federal court. Last week, attorney Charles Gerstein, representing families holding roughly $877 million in unpaid terrorism judgments against North Korea, served a restraining notice on Arbitrum DAO claiming the frozen ETH constitutes North Korean property because the exploit has been widely attributed to Pyongyangs Lazarus Group. That triggered an emergency legal fight. Aave moved earlier this week to vacate the restraining notice, arguing the assets belong to innocent users, not North Korea, and warning that continued delays risk “cascading