## Manhattan Court Clears Arbitrum DAO to Move $71M in North Korea-Linked Frozen ETH to Aave
A Manhattan federal judge has authorized Arbitrum DAO to transfer approximately $71 million in frozen Ether to Aave, modifying a restraining order that had locked the assets. The ruling represents an unusual legal accommodation: the funds can move into the DeFi lending protocol, but terrorism victims' legal claims on the assets remain intact. The ETH is tied to the North Korea-linked Lazarus Group hack that exploited the Ronin Bridge in 2022, one of the largest crypto heists on record.

The court's decision navigates competing pressures—preserving the ability to deploy frozen assets productively while maintaining a legal tether for claimants seeking restitution. Arbitrum DAO had argued that keeping the ETH immobilized created operational constraints; the judge's modification allows the transfer to proceed without dissolving the underlying litigation rights. The funds' connection to state-sponsored cybercrime places the case at the intersection of decentralized governance, sanctions enforcement, and victim compensation frameworks.

The ruling signals how courts may increasingly handle frozen crypto assets tied to illicit state activity—allowing limited movement within DeFi ecosystems while preserving claimants' recovery paths. For Arbitrum DAO, the decision offers operational flexibility under continued legal scrutiny. For terrorism victims and their advocates, the preserved claims mean the fight over these funds is far from resolved. The case underscores the growing complexity of adjudicating crypto assets linked to nation-state hacking operations, where protocol governance, legal jurisdiction, and geopolitical accountability collide.
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- **Source**: CoinTelegraph
- **Sector**: The Network
- **Tags**: Arbitrum DAO, North Korea hack, Aave, frozen ETH, Manhattan court
- **Credibility**: unverified
- **Published**: 2026-05-09 12:01:40
- **ID**: 81107
- **URL**: https://whisperx.ai/en/intel/81107