An interesting situation has arisen in the Arbitrum DAO. An attorney representing victims of North Korean terrorism entered the forum and opposed the release of the frozen 30.765 ETH. Attorney Charles Gerstein claims these funds are actually property linked to North Korea.

What’s the story? Last month (April 19), following the rsETH exploit, the Arbitrum Security Council froze 30.765 ETH. Delegates are now working on a rescue plan to return this money to the original depositors. But Gerstein says that’s impossible because these funds are the rights of his clients (families with court rulings against North Korea).

The legal framework is interesting. Gerstein argues that under U.S. sanctions laws, this ETH could be classified as property owned by the North Korean state. His filing includes three major lawsuits with a total of $877 million in seizure orders. These cases date back decades. One involves the Lod Airport massacre in 1972 (linked to North Korea), another the 2000 kidnapping of Reverend Kim Dong Shik, and a third relates to the 2006 Israel-Hezbollah war. The families won court rulings, but North Korea never paid.

Delegates are divided. Some, like Zeptimus, say the ETH is stolen property and should be returned to the original owners. Under basic property law, a thief cannot acquire ownership. But on the other side, there’s the reality that a state operating under the North Korean flag is responsible for terrorism and owes compensation to victims. This raises the question of who the real victims are.

Representatives like Entropy Advisors and Axia brought up other issues. Users with positions stuck in Aave face daily interest costs. Will insurance products cover this situation? Gerstein’s filings clarify this question significantly. Normal delegate responsibility is one thing, but being subject to active sanctions is another.

Ultimately, a choice must be made between two groups. On one side are Aave depositors who cannot close their positions. On the other are the families behind decades of court rulings against North Korea, still trying to collect. The question of which victim group should have priority appears to be a difficult ethical and legal dilemma for the DAO to resolve.