Aave Files Emergency Motion to Block Ether Seizure in Kelp Exploit Case

• Aave’s legal team has cautioned that the protocol, its users, and the larger DeFi community are suffering “irreparable harm” as a result of the delay.
• If the court maintains Gerstein Harrow’s notice, Aave argues, it might discourage future attempts to recover monies from cyberattacks involving North Korea.

On Monday, decentralized finance protocol Aave took swift action by filing an emergency motion in New York. The purpose was to overturn a restraining order issued by a US law firm, which had been put in place to prevent Arbitrum DAO from releasing 30,766 frozen Ether to the victims of the Kelp exploit.

On Friday, Gerstein Harrow LLP informed Arbitrum DAO of its intention to issue a restraining order, citing the roughly $877 million in default judgments that its clients owe North Korea. With the North Korean hacking gang responsible for the Kelp vulnerability allegedly in possession of the tokens, the law firm asserts that its clients have a justified claim to the Ether.

Coordinated Industry-Wide Effort

Stolen goods cannot be legitimately owned, according to Aave’s emergency motion filed in a New York district court. The statement continued by saying that the North Korean government is only being implicated in the theft, and that the legal firm’s position “defies logic, common sense and the law.”

Arbitrum DAO members have been deliberating on whether to distribute Ether to support DeFi United, a coordinated industry-wide effort to compensate rsETH holders and restore support for rsETH after the April 18 attack of the $292 million Kelp DAO. Voting ends Thursday.

If the court maintains Gerstein Harrow’s notice, Aave argues, it might discourage future attempts to recover monies from cyberattacks involving North Korea because to the likelihood of further legal challenges. It went on to say that this may encourage cybercriminals to attack additional crypto protocols.

Additionally, Aave’s legal team has cautioned that the protocol, its users, and the larger DeFi community are suffering “irreparable harm” as a result of the delay, and that financial damages will not be able to fix this. The whole DeFi ecosystem might be destabilized, according to Aave’s attorneys, if the frozen assets are not released to restore value to the Aave protocol users.

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