Aave rejects North Korea link to $71 million frozen ETH
Aave LLC has asked a federal court in New York to immediately vacate a restraining notice placed on Arbitrum DAO that blocks the transfer of approximately 30,766 ETH worth about $71 million. The emergency filing on May 4 seeks either the prompt removal of the restriction, an expedited hearing, or a $300 million bond from the plaintiffs if the freeze remains in place.
Highlights
- Aave filed an emergency motion on May 4 to lift the restraining notice on $71 million in frozen ETH.
- The company requests immediate relief, an expedited hearing, or a $300 million bond.
- Aave disputes any ownership claims by North Korea or related parties.
- The ETH was frozen by Arbitrum DAO to aid recovery for users impacted by the rsETH incident.
Dispute over frozen assets
The restraining notice stems from a claim by plaintiffs seeking to seize the assets to satisfy judgments allegedly linked to North Korea. Aave strongly contests this position, arguing that stolen funds do not automatically become the property of a judgment debtor—especially when the hacker held them only briefly.“
No court has determined that North Korea, the Lazarus Group, or any affiliated entity carried out the hack,” Aave stated in the motion. The company maintains that the frozen ETH belongs to users who suffered losses in the rsETH incident on April 18, not to external claimants.
Background of the freeze
On April 21, Arbitrum’s security council froze 30,765.6675 ETH and transferred the assets to a designated address to support the recovery of rsETH collateral and assist affected users as part of a broader DeFi United restoration effort involving Aave and Kelp DAO.
Aave argues that the plaintiffs’ claims rely on speculation based on internet reports rather than established legal facts, calling the theory “contrary to logic, common sense, and the law.”
Legal battle highlights risks in DeFi recovery efforts
The case underscores the growing complexity of legal disputes in decentralized finance, where community-led recovery initiatives can clash with external judgments.
The court’s decision could set an important precedent on whether restored assets should return to affected users or be subject to third-party claims. The outcome will be closely watched by the broader DeFi sector.
We have previously highlighted that Kelp DAO hack funds fuel Bitcoin rally through ThorChain.
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