Aave has filed an emergency motion in a New York district court to overturn a restraining order preventing Arbitrum DAO from releasing 30,766 frozen Ether to victims of the Kelp exploit.
The order was sought by law firm Gerstein Harrow LLP on behalf of clients holding roughly $877 million in default judgments against North Korea. The firm argued that because the North Korean hacking group allegedly behind the exploit now holds the tokens, its clients have a rightful claim to the Ether.
In its motion, Aave argues that stolen goods cannot be legitimately owned, calling the firm's position "defies logic, common sense and the law." Aave warns that upholding the order would set a dangerous precedent, discouraging future efforts to recover funds from North Korean cyberattacks and potentially encouraging further attacks on crypto protocols.
Aave's legal team says the delay is causing "irreparable harm" to the protocol, its users, and the broader DeFi community. They warn that not releasing the frozen assets could destabilize the entire DeFi ecosystem.
Arbitrum DAO members are voting through Thursday on whether to distribute the Ether to DeFi United, a coordinated industry effort to compensate rsETH holders after the $292 million Kelp DAO exploit on April 18.