The Arbitrum DAO’s decision to release $70 million to compensate victims of the Kelp DAO exploit has hit a legal roadblock. A U.S. court issued a restraining notice that puts the approved transfer in jeopardy, freezing the funds before they could move.
What the DAO voted for
On [date of vote], the Arbitrum DAO passed a proposal to send $70 million to Kelp DAO. The money was meant to cover losses from a security breach that drained user assets. The vote passed with strong community support, as many saw it as a way to restore trust in the ecosystem after the hack.
The court’s intervention
A U.S. court stepped in with a restraining notice just as the transfer was set to execute. The order targets the funds, effectively pausing the payout. Why the court acted isn’t fully clear from public filings, but the notice suggests a legal dispute tied to the exploit or the parties involved. For now, the $70 million sits in limbo.
What happens next
The DAO’s treasury committee is reviewing the court order. They haven’t said whether they’ll challenge it or seek a modification. Kelp DAO users who expected relief are left waiting. The next court hearing could determine whether the funds are released or tied up for months.
