Aave court motion rejects North Korea ETH claim

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Aave court motion rejects North Korea <a href="https://jpyxx.com/eth-usd/">ETH</a> claim

Aave court motion filed today in New York asks a federal judge to unfreeze $71 million in ETH.

Summary

  • Aave LLC filed an emergency motion in the Southern District of New York to unfreeze 30,765 ETH worth approximately $71 million.
  • The filing argues the funds belong to users victimized in the April 18 Kelp DAO exploit, not to North Korean hackers.
  • Plaintiffs holding $877 million in unpaid terrorism judgments against North Korea claim the ETH is recoverable DPRK property.

Aave LLC has urgently asked a New York court to lift a hold on approximately $71 million in Ethereum (ETH). This money, currently blocked, is intended to be returned to people who were previously affected by a security issue.

According to the filing, the funds in question belong to users of the Aave Protocol who were affected by the Kelp DAO bridge hack on April 18th, and are not connected to North Korea or the hackers believed to be associated with the Lazarus Group.

As an analyst, I’ve been following the case closely. On May 1st, the legal firm Gerstein Harrow LLP served a restraining notice on behalf of three creditors who are owed a total of $877 million due to past terrorism-related judgments against North Korea. Their core claim is that the Ethereum (ETH) in question can be considered property of North Korea because the individuals responsible for the attacks are connected to the Lazarus Group, which is linked to the North Korean government. Essentially, they’re arguing the ETH should be seized to satisfy those outstanding judgments.

Aave strongly disagrees with the claim that the recovered stolen funds should be handled differently. According to Aave’s founder, Stani Kulechov, the DeFi community worked together to get the stolen money back for users, and they are committed to ensuring it’s returned to the rightful owners.

Why the legal theory matters for DeFi

Aave’s recent legal filing makes a straightforward point: stealing something doesn’t give the thief legal ownership. Their argument centers on the idea that simply moving stolen funds between digital addresses doesn’t change who rightfully owns them. Rewriting property law to say the thief keeps recovered funds would unfairly punish the original owners.

According to crypto.news, the Arbitrum DAO has almost unanimous support – over 99% – for a proposal to send frozen ETH to the DeFi United recovery fund. This fund has collected more than $314 million from various DAOs to rebuild backing for rsETH. However, the plan is now awaiting a court ruling.

This case has broader implications. If courts permit creditors without a direct connection to seize funds meant to recover losses in DeFi, it could discourage future attempts to rescue projects and help people get their money back.

Aave is requesting the court to either remove the current warning or require the people suing them to provide a $300 million guarantee while the lawsuit progresses. A date for a court hearing on this request hasn’t been scheduled yet.

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2026-05-05 23:05