Judge clears path for Aave to move $71 million in ETH linked to North Korea hack
Judge Margaret Garnett allowed frozen exploit funds on Arbitrum to move to Aave, but the legal freeze follows the assets as terrorism plaintiffs continue their claim.
What to know:
- A Manhattan federal judge has allowed Aave to proceed with its recovery plan for $71 million in ether tied to a North Korea-linked exploit, permitting the funds to be moved off Arbitrum while for the moment preserving terrorism victims’ legal claims.
- Judge Margaret Garnett’s order modifies a prior freeze so Arbitrum governance can vote onchain to transfer the ETH to an Aave-controlled wallet and shields participants in that vote from liability under the restraining notice.
- The ruling is part of a broader push by terrorism judgment creditors to seize North Korea-linked crypto assets, including a separate lawsuit targeting Railgun DAO and Digital Currency Group over allegedly facilitating the movement of DPRK-controlled funds.
The order also shields participants from liability under the notice, stating that anyone who initiates, votes on or participates in the transfer would not violate the freeze.
Judge Garnett’s ruling follows an earlier off-chain Snapshot temperature check in which Arbitrum delegates overwhelmingly signaled support for returning the frozen ETH as part of Aave’s broader recovery plan. Any actual transfer, however, still requires a separate binding onchain governance vote.
The ruling resolves an immediate standoff that had threatened to derail a coordinated DeFi recovery effort after attorney Charles Gerstein, representing families holding roughly $877 million in unpaid terrorism judgments against North Korea, argued the frozen ETH could be seized because the exploit has been widely attributed to Lazarus Group, which is supported by Pyongyang.
