Judge clears path for Aave to move $71M in ETH linked to North Korea hack
A Manhattan judge has ruled that frozen Ethereum linked to a North Korea hack can be moved to Aave, but the legal freeze remains in place.
The update
A Manhattan federal judge has modified a restraining notice, allowing Arbitrum DAO to move $71 million in frozen Ethereum to Aave. The order permits an onchain governance vote to transfer the funds to a wallet controlled by Aave LLC. It also shields participants in the transfer from liability under the original freeze. However, the legal claim of terrorism victims remains intact, meaning the funds are not free to be used by Aave.
Why it matters
This ruling resolves an immediate standoff that threatened a coordinated DeFi recovery effort following a North Korea-linked exploit. The decision balances the need to return funds to the protocol with the legal rights of victims holding unpaid terrorism judgments against North Korea. It sets a precedent for how courts might handle similar disputes involving state-sponsored hacks and DAO governance.
What to watch
Watch for the outcome of the onchain governance vote and any further legal challenges from the plaintiffs. The ruling does not settle the underlying dispute over ownership of the funds, which could lead to future court battles.
Sources
- CoinDesk — Judge Margaret Garnett's order, modification of restraining notice, and preservation of victims' legal claim.
- Cointelegraph — Details on the Snapshot vote, Aave's recovery plan, and the broader context of the North Korea-linked exploit.
