Federal Judge Clears Aave to Recover $71M in North Korea-Linked ETH from Arbitrum!

A Manhattan federal judge has cleared the way for Aave's $71 million ETH recovery effort, modifying a prior restraining notice so that Arbitrum's onchain governance can vote to transfer the frozen funds to an Aave-controlled wallet. Judge Margaret Garnett's two-page order also shields anyone who initiates, votes on, or participates in the transfer from liability under the freeze — a critical protection for DAO participants who had been caught in legal limbo.

The frozen ETH traces back to a North Korea-linked rsETH exploit attributed to Lazarus Group. Terrorism judgment creditors holding roughly $877 million in unpaid claims against Pyongyang had argued the assets were seizable, creating a standoff that threatened to derail the entire DeFi recovery plan. The ruling preserves their legal claim on the funds even as it allows the transfer to proceed — meaning the freeze follows the assets…