Blockchain investigator ZachXBT has sounded the alarm on a predatory legal maneuver by US-based law firm Gerstein Harrow LLP, which is attempting to claim approximately $71 million in frozen crypto assets linked to the North Korean Lazarus Group. ZachXBT labeled the firm's strategy as 'pure evil.'
Background: The KelpDAO Hack and Asset Freeze
On April 18, 2026, the North Korean Lazarus Group exploited a vulnerability in the LayerZero V2 bridge to steal approximately $290 million from KelpDAO, a decentralized finance protocol. In response, Arbitrum's Security Council swiftly intervened, freezing 30,766 ETH (valued at roughly $71 million) on-chain to prevent further laundering of the stolen funds.
Gerstein Harrow's 'Kill Two Birds with One Old Ruling' Strategy
According to ZachXBT, Gerstein Harrow LLP has filed legal claims against the frozen assets based on a 2015 US court judgment (Han Kim et al. v. North Korea), which stems from the 2000 abduction of a South Korean pastor — a case completely unrelated to the 2026 KelpDAO hack. By invoking this decades-old ruling, the law firm seeks to redirect the frozen $71 million to satisfy its clients' pre-existing claims, essentially cutting ahead of the actual victims of the KelpDAO theft in any recovery queue.
ZachXBT's Fury and Community-Led Response
ZachXBT did not mince words in his criticism, posting on X: 'This is a predatory US law firm with a strategy that is pure evil.' He further accused the firm of piggybacking on his own on-chain investigation work to harm real victims. To counter this legal threat, ZachXBT proposed the creation of a decentralized autonomous organization (DAO) to pool community resources and mount a coordinated legal challenge against Gerstein Harrow. The suggestion quickly garnered widespread support within the crypto community.
The Broader Lazarus Threat
The KelpDAO incident is just one chapter in Lazarus's extensive criminal history. Since 2017, the group has stolen over $6 billion in cryptocurrency, accounting for 76% of all crypto hack losses in 2026 alone. Just weeks before KelpDAO, Lazarus also drained approximately $285 million from Drift Protocol. Despite the Arbitrum freeze, on-chain data suggests Lazarus has already moved another $175 million in ETH from the hack.
A New Legal Front in the Battle Against Hackers
This case introduces a disturbing legal dimension to crypto recovery efforts: the weaponization of unrelated court rulings to compete for frozen hacker funds. The outcome of this battle will determine whether the $71 million ultimately returns to the rightful victims of KelpDAO or is diverted through legal loopholes. ZachXBT and the broader crypto community are closely watching, as this precedent could affect countless future recovery attempts.