Federal Judge Clears Path for Arbitrum DAO to Move $71M in Frozen Ether

A federal judge in Manhattan has made a significant decision that could pave the way for the recovery of $71 million worth of frozen Ether from Arbitrum DAO. The judge modified a restraining notice that had locked the assets inside Arbitrum DAO, allowing an on-chain governance vote to authorize transferring the funds to a wallet controlled by Aave LLC.

The decision is seen as a procedural milestone in the ongoing effort to unwind the aftermath of the Kelp DAO exploit. While it does not grant unfettered access to the money, it does enable the transfer process to move forward under certain conditions. The on-chain governance vote is still required to finalize any transfer, and the court retains the terrorism victims' claim on the funds.

The ruling highlights the evolving interface between courts, DeFi governance, and recovery planning. As the industry continues to navigate hacks, sanctions, and attribution debates, observers will look for clearer frameworks that balance remedial action with accountability.