ZachXBT Accuses US Law Firm of Taking $71 Million in Lazarus Funds

Bittime - Investigator onchain ZachXBT accused US law firm Gerstein Harrow LLP of filing a claim for frozen crypto assets worth approximately $71 million allegedly related to Lazarus Group. 

The funds are said to be related to the KelpDAO exploit in April 2026. This accusation has sparked concern in the crypto community because the legal claim is considered to slow the recovery process for the direct victims of the hack.

Key Points

• ZachXBT accuses Gerstein Harrow of claiming $71 million in frozen funds.
• The funds are said to be related to the exploitation of KelpDAO which allegedly involved the Lazarus Group.
• The crypto community is concerned that the victims' recovery process could be disrupted.

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ZachXBT Allegations Against US Law Firm

ZachXBT, widely known as an onchain investigator in the crypto community, highlighted Gerstein Harrow LLP's actions in the case of frozen funds related to the KelpDAO hack.

According to him, the law firm is using the old court ruling as a basis to file a claim for funds that are currently part of the recovery process resulting from the latest exploitation.

In the text source, Gerstein Harrow is said to have tried to claim around 30,766 ETH which is estimated to be worth around $71 million.

The assets were frozen following allegations that the funds were linked to the activities of the Lazarus Group, a hacking group said to be backed by the North Korean state.

ZachXBT believes the strategy is detrimental to the direct victims of the KelpDAO incident. He said the law firm used a highly unethical approach.

Because, they are trying to put their clients first in the queue for recovery, even though the claims they use are from old cases and are not directly related to the 2026 hack.

Read also: Facts about the Rp150 Billion Crypto Scam Case Involving Indonesian Citizens

Frozen Funds from KelpDAO Exploitation

The case stems from an exploit of KelpDAO on April 18, 2026. In the source text, Lazarus Group allegedly siphoned off approximately $290 million from the protocol through a vulnerability in the LayerZero V2 bridge.

Following the incident, the Arbitrum Security Council took emergency action on-chain by freezing 30,766 ETH. This measure was taken to prevent the funds from being laundered or further transferred by the parties suspected of being involved in the hack.

Fund freezes like this are one way communities and network administrators respond to major attacks. However, once assets are frozen, new problems arise.

Who is entitled to receive these funds, what the legal process is like, and whether the victims can immediately receive fair compensation are big questions.

In this case, ZachXBT believes that Gerstein Harrow's claims could make the recovery process even slower and more complicated.

Basis for Claim from Old Decision

The text's source cited Gerstein Harrow as using a 2015 United States court ruling in the case of Han Kim and others against North Korea. The case stemmed from the kidnapping of a South Korean pastor in 2000.

The problem is, the ruling has no direct connection to the 2026 KelpDAO hack. Therefore, the claim of frozen funds related to the latest exploit is considered controversial by ZachXBT and some in the crypto community.

In simple terms, the law firm is said to be trying to use old judgments to fulfill payment obligations for its clients.

However, if the funds did indeed come from the KelpDAO exploit, then the direct victims of the 2026 hack could potentially have to contend with legal battles with parties whose claims stem from a different case.

This situation demonstrates that recovering crypto funds doesn't solely depend on blockchain tracking. Once funds are frozen, legal action can become an equally complex new challenge.

Read also: Crypto Cases in Indonesia from 2020-2026, Complete List

Strong Reaction from ZachXBT

ZachXBT delivered a strong critique of the move via the X platform. He called the law firm's strategy predatory and highly detrimental.

He also criticized the use of onchain research findings he produced to support claims that he said were biased against the victims of the latest hack.

The crypto community's outrage stems from ZachXBT's significant role in uncovering the flow of hacked funds. In the KelpDAO case, its work is said to have been instrumental in establishing the evidence base that facilitated the fund freeze.

However, when the tracking results are then used in legal proceedings, which are deemed to divert funds from the direct victims, new concerns arise. The crypto community views this loophole as a serious problem in the digital asset recovery process.

ZachXBT also proposed that the community form a decentralized autonomous organization (DAO) to take coordinated legal action against the firm. This proposal reportedly received widespread and rapid community support.

Read also:Crypto Markets Experience Most Hacked Month in April 2026

Lazarus Group and Pressure on the Crypto Industry

Number Lazarus Group has long been a focus of attention in crypto security. This group is frequently linked to a number of major hacks targeting digital asset protocols, bridges, and platforms.

In the text source, the Lazarus Group is said to have stolen more than $6 billion in crypto assets since 2017. This group is also said to have contributed 76 percent of the total crypto hacking losses recorded so far in 2026.

The KelpDAO exploit isn't the only major incident linked to the group. Text sources also mention the theft of approximately $285 million from Drift Protocol in early April.

If true, this network shows the enormous pressure the crypto industry faces in maintaining the security of user funds.

However, the problems don't stop with technical attacks. Once funds are traced and frozen, the recovery process can become a complex legal issue.

The Gerstein Harrow case shows that frozen funds can become the object of competing claims from different parties.

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FAQ

Who is ZachXBT?

ZachXBT is an onchain investigator known for tracing the flow of funds in various crypto hacks and scams.

What are ZachXBT's allegations against Gerstein Harrow LLP?

ZachXBT accused the law firm of filing a claim for approximately $71 million in frozen funds allegedly related to the exploitation of KelpDAO and the Lazarus Group.

What does the $71 million fund have to do with KelpDAO?

The funds are said to be part of the ETH frozen following the KelpDAO exploit in April 2026.

Who is Lazarus Group?

The Lazarus Group is a hacking group often linked to North Korea and is suspected of being involved in a number of major attacks on the crypto industry.

Why is this case important for the crypto industry?

This case demonstrates that recovering hacked funds depends not only on blockchain technology, but also on legal processes that can affect victims' rights.