Mr. Gerstein,
With real respect for the judgments your clients hold against the DPRK, two points of pushback on the restraining notice itself:
-
The frozen ETH at 0x…0DA0 is not property in which the DPRK has an “interest” under CPLR §5222(b). It’s stolen property. Lazarus exploited the rsETH protocol, drained funds belonging to depositors, and held them transiently at an address now under the control of Arbitrum’s Security Council. Theft doesn’t pass the title. That’s elementary property law in New York and most other jurisdictions (cf. UCC §2-403(1): a thief acquires no title and cannot pass title even to a good-faith purchaser). Transient possession through an exploit is not ownership.
-
The rightful owners are the rsETH depositors whose funds were drained. Their ownership claim didn’t extinguish when Lazarus moved the tokens. It followed the assets. DeFi United is not a third party receiving a windfall from the DAO. It’s a coordinated mechanism for returning those assets to the original owners.
If “code is law” carries any weight here, it cuts the same way: the exploit was a violation of the protocol’s intended function, not an exercise of it. The principle does not vest ownership in the actor who broke the rules.
The Security Council’s freeze of these funds was itself a code-level response to an exploit, and it created exactly the window we’re in now: the DAO deliberating and directing the assets back to their rightful owner. The exploit was a break with the protocol’s intended function. This vote is how the protocol corrects it.
Your clients’ losses are real and the DPRK should answer for them. But the remedy the restraining notice asks for, blocking the return of stolen funds to their actual owners shifts the cost of the DPRK’s debt onto a different set of victims who were themselves robbed. That compounds the original harm; it doesn’t redress it.
Respectfully.