Aave Seeks to Free $71 Million in Frozen Ethereum

Aave has filed an emergency motion in a New York federal court to vacate a restraining notice that is blocking 30,766 ETH worth $71 million from being returned to victims of the KelpDAO exploit.

The motion argues that the frozen funds do not belong to North Korea, but rather are stolen property. According to Aave, under U.S. law, a thief does not gain lawful ownership of stolen property simply by taking it. This means that the restraining notice has no valid legal basis and must be vacated.

Aave's motion also warns of the potential consequences if this theory stands. If every future DeFi recovery effort involving a state-sponsored hack becomes a target for unrelated creditors, protocols may become hesitant to freeze stolen funds at all, which could have a chilling effect on the industry.