Creditors move to seize $71M in stolen ETH before Kelp exploit victims can be repaid.

Aave LLC filed an emergency motion on May 4 to vacate a restraining order that a New York court approved against Arbitrum DAO, targeting 30,765 ETH frozen by Arbitrum's Security Council after the April 18 Kelp DAO LayerZero bridge exploit. The company argues the recovered assets were explicitly designated for victim restitution and cannot lawfully be attached by outside creditors simply because Lazarus Group — the alleged North Korean attacker — briefly held them.

The plaintiffs appear to be leveraging prior judgments tied to North Korea to argue the frozen ETH is attachable property. Aave's motion pushes back hard: a thief's momentary custody does not transfer lawful ownership, and Arbitrum DAO is not a juridical entity capable of being served. That second argument sits on shaky ground — US courts have already treated DAOs as general partnerships in Lido, bZx, and Compound-related…