Judge Delays Aaves Bid to Unfreeze $71M ETH from Kelp DAO Exploit
A New York judge has delayed a decision on Aave‘s emergency motion to unfreeze $71 million worth of Ether (ETH) tied to the $293 million Kelp DAO exploit, a significant DeFi theft attributed to North Korea’s Lazarus Group. Judge Margaret M. Garnett has requested additional briefings from both Aave and the law firm Gerstein Harrow LLP, extending the process through at least June 5, 2026. The frozen funds, which represent approximately one-quarter of the stolen assets, were locked by Arbitrum‘s Security Council on April 20 in an emergency action to prevent the attacker from moving the ETH further. Aave has argued that the frozen ETH is critical for mitigating user losses and stabilizing the DeFi ecosystem, warning of potential liquidations and broader market disruption if the assets remain inaccessible. However, Gerstein Harrow LLP, representing creditors claiming rights to the funds, has contested Aave’s request, filing a restraining notice earlier this month. Judge Seeks Specific Legal Clarifications Judge Garnett outlined six key legal issues that require further clarification before she can rule on the matter. These include whether the transactions tied to the exploit fall under New Yorks shelter principle, the distinction between fraud and theft in this context, and the legal framework governing