Gerstein Harrow LLP, a U.S.-based law firm, filed a restraining notice against Arbitrum DAO in the U.S. District Court for the Southern District of New York, aiming to claim the funds from victims of the KelpDAO exploit. The order blocks the transfer of the 30,766 ETH frozen in Arbitrum's governance wallet.

The firm argues that because the Kelp exploit has been attributed to North Korea's Lazarus Group, the recovered funds constitute DPRK-linked property and therefore can be seized to satisfy a decade-old default judgment for its clients.

Crypto crime investigator ZachXBT called the move "pure evil," describing the firm as predatory. Gerstein Harrow is the same firm behind the notorious PoolTogether lawsuit, in which an Elizabeth Warren staffer sued the savings protocol after depositing just $10. PoolTogether ultimately won the lawsuit in 2023.

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Aave published its technical implementation plan for DeFi United, a coordinated effort to recover the backing of KelpDAO's rsETH LST following the LayerZero bridge exploit on April 18, 2026. Beyond restoring rsETH's full backing, the recovery plan also includes steps to recover the 107,000 rsETH being used as collateral across seven exploiter addresses on Aave and Compound Finance.

Yesterday, DeFi United announced that it secured sufficient ETH commitments to bring rsETH back to its nominal 1.07 ETH exchange ratio. The ETH will be converted to rsETH in tranches and deposited into the bridge lockbox, allowing the bridge to resume operations.

Recovering the rsETH collateral in DeFi will involve governance proposals to temporarily adjust rsETH's oracle price on both Ethereum and Arbitrum, enabling controlled liquidations of the exploiter's positions. The recovered rsETH will then be redeemed for ETH through Kelp and used to clear the resulting deficits on both networks. Compound will execute a similar process.

Once the recovery is complete, all temporary configuration changes will be fully reverted, and frozen markets will be unfrozen, allowing lenders to withdraw collateral. Aave noted that the successful execution relies on the attacker not interfering with the liquidation sequence.

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Aave founder Stani Kulechov announced that the DeFi United initiative has secured sufficient funds to restore the full backing of rsETH following the April 18 LayerZero bridge exploit. Execution remains pending, subject to governance votes and the finalization of indicative agreements. Aave has also aligned with KelpDAO and LayerZero on the technical steps required to carry out the recovery plan.

Over the weekend, Aave submitted a governance proposal to the Arbitrum DAO requesting the release of 30,765.67 ETH frozen by the Arbitrum Security Council in connection with the exploit. If approved, the funds would be directed into a 2-of-3 Gnosis Safe controlled by Aave Labs, KelpDAO, and Certora, and applied solely toward restoring rsETH's backing. The full AIP governance process is estimated to take approximately 49 days to complete. Aave expects to release a detailed recovery plan and next steps for affected users in the coming days.

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Disclaimer: Content is for informational purposes only, not endorsement or investment advice. The accuracy of information is not guaranteed.