New York federal court orders Arbitrum DAO to keep $71 million in ETH frozen amid North Korea-linked judgment bid

PaperImperium, who leads MegaETH, said in an X court filing that the U.S. District Court for the Southern District of New York has issued an injunction barring Arbitrum DAO from moving roughly $71 million worth of ETH that had been frozen following the KelpDAO hack. According to the filing, the plaintiff is seeking to tap the frozen assets to satisfy outstanding judgments tied to allegations of North Korea's long-running involvement in terrorism, kidnappings and related matters. The plaintiff also requested alternative service and is treating Arbitrum DAO as a liable "partnership." Court materials describe Arbitrum DAO as having a Security Council governed by ARB holders with emergency powers. The documents warn that council members who decline to comply could face legal exposure, including potential contempt of court. Market participants are watching the case as a possible precedent for U.S. courts directly constraining DAO governance, underscoring mounting legal and compliance pressure on DeFi protocols under existing frameworks.