Aave has now taken the Arbitrum recovery dispute from governance forums into court. In a May 4 filing in the Southern District of New York, Aave LLC asked a judge to vacate the restraining notice that has blocked Arbitrum DAO from releasing roughly 30,765.67 ETH frozen after the rsETH exploit.

What Aave is arguing

Aave's motion says the restrained assets should go back to victims of the exploit rather than remain tied up by judgment creditors pursuing claims against North Korea. The filing asks for immediate relief, or at minimum an expedited hearing schedule. If the notice stays in place while the dispute continues, Aave also asks the court to require plaintiffs to post a cash bond of at least $300 million.

That is a meaningful escalation from the earlier forum dispute. On May 1, Judge Margaret Garnett authorized alternative service on Arbitrum DAO, letting plaintiffs post legal notices in the governance forum and serve related parties by mail and email.

Why it matters

The underlying Arbitrum proposal would send the frozen ETH into the coordinated rsETH recovery effort backed by Aave Labs, KelpDAO, EtherFi, Certora, and others. Aave argues that holding the assets back creates broader harm for affected users and for DeFi markets still absorbing the fallout from the exploit.

No court has ruled yet on Aave's request to vacate the notice. The Arbitrum Foundation said on May 4 that it is monitoring the filings and consulting counsel before deciding next steps.