Aave fights to unfreeze $71M in ETH, warning North Korea seizure claim would wreck DeFi hack recovery

Aave filed a motion Monday in the Southern District of New York to vacate a restraining notice that has locked roughly 30,765 ETH — about $71 million — frozen by Arbitrum's Security Council following last month's rsETH exploit. The notice was served by lawyers representing judgment creditors holding $877 million in damages awards against North Korea, who argue the recovered funds can be claimed because the attackers are allegedly linked to Pyongyang's Lazarus Group.

Aave's lawyers call that theory "flatly wrong," arguing the restrained ETH belongs to blameless protocol users, not North Korea, and that a thief briefly holding assets does not confer legal ownership. The filing also disputes the DPRK attribution itself, calling it "conjecture" based on unverified reports.

The stakes extend well beyond this dispute. Aave warns that keeping the funds frozen risks cascading liquidations and…