The team behind leading lending protocol Aave has filed an emergency motion in a U.S. federal court to lift the freeze on 30,766 ETH (approximately $73 million). These funds were frozen by the Arbitrum Security Council following the Kelp hack.
Aave LLC has filed an emergency motion to vacate a restraining notice served on Arbitrum DAO on May 1, 2026, that attempts to seize approximately $71 million in ETH belonging to victims of the April 18 exploit.
— Aave (@aave) May 4, 2026
A thief does not gain lawful ownership of stolen property simply by… pic.twitter.com/NwgKIdU1L7
In early May, the DAO of the L2 network initiated a vote on transferring the funds to the DeFi United fund. The Southern District Court of New York prohibited the use of these funds at the request of plaintiffs linked to past cases involving North Korean terrorist activities.
Plaintiffs are seeking to have the ETH recognized as part of a potential restitution. Their argument is based on the assumption that the Kelp attack was orchestrated by the Lazarus Group.
Aave's Position
Aave has called the court's reasoning legally flawed.
"A thief does not own what they stole. These funds belong to the users from whom they were taken, and no one else," stated the protocol's founder, Stani Kulechov.
He explained that even temporary control over the stolen assets does not convert them into the thief's property, nor does it justify considering them as property of North Korea.
The project has demanded the complete lifting of the asset freeze or that plaintiffs post a bond of at least $300 million to cover potential damages from further blocking.
Aave argues that prolonged detention of the coins under court order jeopardizes the entire recovery mechanism following the hack and delays compensation for affected users.
The voting in the Arbitrum DAO will conclude on May 7. At the time of publication, over 99% of participants support the transfer of assets to DeFi United.
Source: snapshot.org.
Recall that in April, Arbitrum tech council member Griff Green called for a boycott of USDC due to its weak security system.