A New York federal judge has modified the restraining notice that blocked Arbitrum's planned release of 30,765.67 ETH frozen after the rsETH exploit, giving Aave's recovery effort a path to move forward without fully ending the creditors' claim.

What the order does

In a May 8 order, Judge Margaret Garnett said the restraining notice can be modified to allow an onchain vote and transfer of the immobilized assets to a wallet controlled by Aave LLC. The same order says anyone who initiates, votes on, or participates in that transfer will not be treated as violating the notice.

That is a narrower ruling than a full win for Aave. The court also said Aave LLC must hold the assets subject to the same restraining notice after the transfer, meaning the legal dispute over whether North Korea judgment creditors can reach the funds is still alive.

Why it matters

Arbitrum's Security Council said on April 21 that it froze 30,765.6675 ETH linked to the KelpDAO exploiter and moved it into the DAO-controlled recovery address 0x0000000000000000000000000000000000000DA0. A later Arbitrum proposal backed by Aave Labs and other ecosystem parties asked governance to release that balance into the coordinated rsETH remediation effort.

The conservative takeaway is that the court has now removed the immediate procedural block on the transfer path. But the assets are not legally free and the broader fight over ownership and seizure rights has not been resolved.