Aave Begins Phase II Recovery After Liquidating Hacker-Linked Positions
Tech Aave Begins Phase II Recovery After Liquidating Hacker-Linked PositionsAave liquidated 8 hacker-linked positions tied to the rsETH exploit on Aave V3.A Manhattan federal judge allowed the transfer of frozen $71M in ETH to support recovery.Aave will burn the seized rsETH and retire the related LayerZero packet. Aave has moved into the second phase of its rsETH recovery plan after liquidating the hacker-linked positions tied to last months exploit on Aave V3 across Ethereum and Arbitrum. In an update posted on X, the protocol confirmed that the thiefs eight identified positions were liquidated on May 6. The recovered rsETH collateral was transferred to the Recovery Guardian under a governance proposal previously approved by the Aave DAO. The exploit, linked to North Korea‘s Lazarus Group, allowed attackers to use unbacked rsETH as collateral to borrow nearly $230 million in ETH from the protocol. Arbitrum’s Security Council later froze 30,765 ETH, worth roughly $71 million, connected to the attack. Aave said normal users and Umbrella stakers were not affected during the liquidation process. Court Clears Path for Asset Transfer The recovery effort faced legal complications after families holding terrorism judgments against North Korea attempted to claim the frozen ETH through a restraining notice filed in Manhattan federal court. The plaintiffs