Aave Seeks Relief from Frozen Ethereum Freeze

Aave has taken action to resolve a dispute over frozen Ethereum (ETH) worth approximately $71 million. The company filed an emergency motion in New York on May 4 to vacate a restraining notice served by Gerstein Harrow LLP, which represents parties claiming the ETH can satisfy judgments tied to alleged North Korea-linked crypto theft.

Aave disputes this claim, arguing that the stolen assets do not become property of the judgment debtors. The company's lawyers contend that no court has found that North Korea or any connected party carried out the hack, and that the immobilized assets belong to users who suffered losses during the exploit.

The dispute centers around approximately $71 million in frozen ETH, which was moved to a designated address so it could help restore rsETH backing and improve conditions for affected users. Aave warns that keeping the ETH frozen could delay user withdrawals and recovery, causing irreparable harm to Aave users, protocol operations, and the wider DeFi community.