Aave has filed a motion to unfreeze $73 million in stolen ETH, arguing the funds rightfully belong to users affected by the Kelp hack.
Aave, a prominent decentralized lending platform, has taken legal action in a U.S. federal court to unfreeze 30,766 ETH, valued at around $73 million. These assets are currently held by the Arbitrum Security Council following a hack known as the Kelp exploit.
The motion, filed by Aave LLC, seeks to annul a restraining order placed on the Arbitrum DAO on May 1, 2026, which aims to seize the ETH that belongs to victims of the April 18 incident. The court had previously restricted the funds due to claims from plaintiffs connected to cases involving North Korean terrorism.
The plaintiffs argue that the stolen ETH should be included in any restitution efforts, claiming that the Kelp hack was executed by the Lazarus Group, a notorious hacking collective linked to North Korea.
Aave's Legal Argument
Aave contends that the court's rationale is fundamentally flawed. Stani Kulechov, the founder of Aave, asserted that stolen property does not grant ownership to the thief. He emphasized that the funds rightfully belong to the users from whom they were taken and should not be classified as belonging to North Korea.
The protocol has called for either the complete unfreezing of the assets or the requirement for plaintiffs to post a bond of at least $300 million to cover potential damages from the ongoing asset freeze. Aave warns that the continued detention of these coins hampers the recovery process for victims and delays necessary compensation.
The vote within the Arbitrum DAO regarding the transfer of these funds to the DeFi United fund is set to conclude on May 7, with preliminary results indicating that over 99% of voters are in favor of the transfer.
