Judge Clears $71M ETH Transfer From Arbitrum to Aave, But North Korea Creditors Retain Legal Claim

According to The Block, on Friday (May 9), Judge Margaret Garnett of the U.S. District Court for the Southern District of New York modified a restraining notice that had locked 30,766 ETH (~$71 million) inside Arbitrum DAO since May 1. The modification permits an onchain governance vote to transfer the frozen ether to a digital assets wallet controlled by Aave, and explicitly protects ARB token holders who vote on or execute the transaction from violating the freeze order.

Arbitrum delegates approved the release on Thursday with 182.2 million ARB tokens in support and approximately 91% voting power in favor. However, the ruling is a compromise: the restraining notice remains attached to the assets even after transfer to Aave, meaning the terrorism judgment creditors—who claim the ETH qualifies as North Korean property under the Foreign Sovereign Immunities Act—retain their legal claim. If the court ultimately sides with the plaintiffs, Aave could be compelled to surrender the funds.