NY Judge Delays Ruling on Aave Request to Unlock $71M in ETH Linked to Kelp DAO Hack

A New York judge has postponed a ruling on Aave’s emergency request to unlock $71 million in crypto tied to victims of the $293 million Kelp DAO hack, pushing the case forward for further review in June.

At the center of the dispute are ETH funds frozen by Arbitrum, which Aave is seeking to access to aid recovery efforts following the large-scale DeFi exploit. However, the situation became contested in early May when law firm Gerstein Harrow LLP filed a restraining notice, asserting that its clients have a legal claim to the assets.

In response, Aave submitted an emergency motion arguing that keeping the funds locked could trigger user liquidations and wider instability across decentralized finance markets, stressing the need for immediate access to prevent additional financial strain.

Despite these concerns, Judge Margaret M. Garnett said the filing did not sufficiently demonstrate how continued losses would occur if the restraining notice stayed in effect. She also highlighted the complexity of the case and instructed both sides to provide additional information before the next hearing.

Source: US District Court