US court freezes $71M in Ethereum from KelpDAO hack, blocking Arbitrum DAO's recovery plan.

A US court has frozen $71 million in Ethereum recovered by Arbitrum DAO after the Lazarus Group allegedly stole $292 million from KelpDAO in April 2026. The Southern District of New York issued the freeze to enforce a garnishment order filed by creditors with judgments against North Korea, linking the stolen funds to the Lazarus Group. This legal action halts Arbitrum DAO's plan to compensate victims through decentralized governance, forcing the case into US federal court jurisdiction. The outcome will impact how decentralized autonomous organizations handle hacked funds in the future, with a formal divestiture hearing pending in New York.