- DeFi giant Aave filed an emergency motion on Monday in a New York court to block a law firm’s attempt to freeze 30,766 Ether ($877 million) intended for victims of the Kelp DAO hack.
- Law firm Gerstein Harrow LLP served a restraining notice, claiming its clients have a legal right to the funds because North Korea, against whom they have default judgments, was behind the exploit.
- Aave argues that a thief cannot gain lawful ownership, warns that the delay causes “irreparable harm” to users and the ecosystem, and could deter future recovery efforts.
Aave filed an emergency motion in a New York district court on Monday, urgently seeking to vacate a restraining notice that blocks the transfer of 30,766 Ether to victims of a recent exploit. The legal move directly challenges Gerstein Harrow LLP, a US law firm that served the notice on Friday.
The law firm argues its clients are owed over $877 million from default judgments against North Korea. Consequently, it claims a right to the Ether because the suspected North Korean Hacker group behind the Kelp exploit once possessed the tokens.
However, Aave’s filing contends that “a thief doesn’t gain lawful ownership of property by stealing it.” It further states the firm’s argument “defies logic, common sense and the law,” noting North Korea is only suspected in the theft.
Meanwhile, the Arbitrum DAO is voting on whether to release the Ether to assist DeFi United in making rsETH holders whole after the $292 million April 18 hack. Voting on this critical restitution effort ends May 7.
Aave warned the court that upholding the notice would cause “irreparable harm” to the protocol and its users, harm which monetary damages cannot later cure. It argued this precedent could destabilize the entire DeFi ecosystem by deterring future recovery efforts for North Korea-related hacks.
The protocol’s lawyers emphasized, “The immobilized assets do not belong to North Korea or any affiliated entities.” Instead, they belong to the Aave protocol users victimized during the cyber exploit.
If the court does not immediately vacate the notice, Aave requests Gerstein Harrow post a $300 million bond to maintain it. The law firm has a history of similar claims, including for assets from the 2023 Heco Bridge hack and the 2025 Bybit exploit. A judge has not yet ruled on the emergency motion or set a hearing date.
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