Arbitrum is moving ahead with a governance proposal that would transfer 30,765 ETH frozen after the Kelp DAO attack into a wallet controlled by Aave. Using the valuation cited in the source, the amount is worth about $71 million. The transfer would not give Aave open access to the assets, as court-imposed restrictions would remain in place.
Court ruling allows a vote, not unrestricted control
The proposal, described as the Constitutional Arbitrum Improvement Proposal, is presented as a formal governance process for major decisions inside the Arbitrum community. Its latest version relies on a recent ruling from Judge Margaret Garnett, who allowed Arbitrum DAO to hold an on-chain vote on moving the frozen ETH from its current account to an Aave-controlled wallet.
Even if tokenholders approve the move, Aave would not be free to use or transfer the funds at will. The report says any broader access would require additional court authorization. Legal limits would continue to govern the assets, and ongoing lawsuits tied to alleged North Korea links and terrorism compensation claims would still be relevant as the transfer takes place.
North Korea allegations remain unproven in court
The dispute intensified after blockchain analysis firms linked the incident to North Korea’s Lazarus Group. Still, the source is explicit on one point: those claims have not been formally recognized in Arbitrum’s governance process or legally validated in the court proceedings now underway.
The article notes that technical analysis points to possible North Korean involvement, but that allegation has not been legally confirmed. At this stage, the claim remains grounded in outside forensic and investigative reporting rather than a judicial finding.
Recovered crypto sits at the center of competing claims
Lawyers representing families tied to more than $877 million in outstanding US terrorism compensation claims have argued that, if the assets are later proven in court to belong to North Korea, they could be seized to satisfy court-awarded compensation. That argument introduces a second track for the disputed ETH.
Aave is taking the opposite view. It says the frozen assets belong to users harmed in the attack and that a hacker’s temporary control did not transfer ownership. The case has turned into a broader fight over who should receive recovered on-chain funds: DeFi users affected by the exploit, or claimants seeking compensation under separate legal judgments. Because Aave is one of the largest lending protocols in DeFi, the outcome is being watched closely.