Well, the saga of Arbitrum freezing funds linked to North Korean hackers has taken an even more dramatic turn. A federal court in New York, USA, has issued a ruling ordering Arbitrum to compensate a group of Americans who have been persecuted by North Korea for the frozen funds. 🤣

The background is that, over the past several decades, North Korea has faced collective lawsuits from many people with U.S. citizenship due to actions such as terrorism, kidnapping, and illegal detention. However, the North Korean government has never taken the initiative to pay compensation. So, these plaintiffs have been looking worldwide for assets belonging to North Korea, and then asking the U.S. government to seize them to be applied toward compensation. And before this, there were already many successful cases—most famously, in 2017, when American college student Otto was arrested and ultimately died after stealing a poster while traveling in North Korea. After his parents sued North Korea and won, a U.S. court ruled that North Korea must pay $500 million in compensation. But North Korea ignored the ruling. In the following years, the U.S. government intercepted a large North Korean cargo ship, auctioned that ship, and then handed it over to his parents.

Arbitrum’s freezing of funds belonging to North Korean hackers has taken a more dramatic turn. A federal court in New York, USA, has issued a ruling requiring Arbitrum to compensate a group of Americans who have been persecuted by North Korea with the frozen funds 🤣.

The backdrop is that over the past decades, North Korea—through acts such as terrorism and illegal kidnappings and detentions—has faced collective lawsuits filed by many people holding U.S. identities. However, the North Korean government has never voluntarily paid compensation. So these plaintiffs have been seeking North Korean assets worldwide, then urging the U.S. government to seize them for compensation. There have been many successful cases before. The most famous one is: in 2017, an American college student named Otto was arrested and later died after being held when he stole a poster during a trip to North Korea. After his parents sued North Korea and won, a U.S. court ordered North Korea to pay $500 million. North Korea ignored it. In subsequent years, the U.S. government intercepted a large North Korean cargo ship, auctioned it off, and sent the proceeds to his parents.

After the North Korean hackers’ stolen funds from AAVE were frozen by Arbitrum, these plaintiffs argued that the money belongs to North Korea and should be paid to them. So the U.S. court moved decisively again. First, it required Arbitrum to cooperate in preserving the funds and holding them pending the court’s next instructions. During this period, there must be no transfer or movement. In the ruling, the Arbitrum DAO was classified as a partnership enterprise, and service of process was confirmed to be effective. If Arbitrum does not comply, it will be charged with contempt of court. Specific members—such as several core voters in the DAO—would be subject to compulsory measures.