Aave files emergency motion to vacate law firm's restraining notice blocking Kelp exploit recovery funds

[kevin1]

Aave has filed an emergency motion in a New York district court seeking to vacate a restraining notice from Gerstein Harrow LLP that is blocking the Arbitrum DAO from transferring 30,766 ETH to victims of the Kelp DAO exploit. The law firm served the notice on Friday, arguing that its clients hold over $877 million in default judgments against North Korea and that because the Lazarus Group subunit TraderTraitor is suspected of carrying out the April 18 hack, the frozen Ether constitutes DPRK property against which those judgments can be enforced. Aave's legal team rejected that argument directly, stating that a thief does not gain lawful ownership of property by stealing it and that the law firm's position defies logic, common sense, and the law. Aave further argued that the attribution of the hack to North Korea is based on conjecture from internet posts rather than established legal fact.

The core of Aave's legal argument is that the frozen Ether belongs to Aave protocol users who were victimized in the exploit, not to North Korea or any affiliated entity. By the law firm's own reasoning, any asset briefly touched by a suspected state-sponsored hacker during a cyber exploit could be claimed by holders of North Korea judgments, a precedent that Aave argues would deter future recovery efforts for all North Korea-related hacks and create a legal tool that bad actors could exploit by intentionally routing stolen funds through DPRK-linked wallets to trigger competing claims. If the court cannot immediately vacate the notice, Aave's lawyers have requested that Gerstein Harrow post a $300 million bond to maintain the restraining notice while the matter is decided. The Arbitrum DAO governance vote on releasing the ETH to DeFi United closes May 7, and no hearing date has yet been scheduled.

[etfs]

Arbitrum DAO vote closing May 7 with no hearing scheduled yet creates a dangerous timing gap for affected users.

[johnblockbuster]

Hack victims just want their money back and somehow there is now a federal court involved, incredible situation