Arbitrum DAO Opens Vote on $71M ETH Transfer to Aave

TLDR

• Aave and other stakeholders have launched a binding Arbitrum governance vote to transfer 30,765 ETH worth $71 million.
• The proposal follows a court order that authorizes an on-chain vote to move the frozen ether.
• Blockchain forensics firms have attributed the exploit to North Korea’s Lazarus Group, though courts have not confirmed this claim.
• Lawyers representing families with $877 million in unpaid judgments argue the assets could be used for enforcement if linked to North Korea.
• Aave disputes that position and maintains that the ether belongs to users harmed in the exploit.

Aave and other affected parties have started a binding Arbitrum governance vote to transfer $71 million in frozen ether. The proposal seeks approval to move 30,765 ETH to an address controlled by Aave LLC. Voting will begin on May 15 under Arbitrum’s formal on-chain governance process.

Aave and Arbitrum Governance Vote Structure

A Constitutional Arbitrum Improvement Proposal, known as an AIP, governs binding protocol actions. The amended AIP follows a recent court order issued by Judge Margaret Garnett. The order authorizes an on-chain vote to transfer the immobilized ETH to an Aave LLC wallet. However, the order requires compliance with a restraining notice tied to terrorism judgment creditors. As a result, the funds would remain under strict legal limits even after transfer.

Arbitrum’s Security Council previously immobilized the 30,765 ETH in a designated wallet. If token holders approve the measure, the protocol will move the funds to the specified Aave LLC address. However, Aave LLC cannot freely use or deploy the assets without court permission. The proposal states that the transfer must respect existing legal constraints. Therefore, the DAO vote serves as the mechanism to execute the court’s directive.

Legal Dispute Over ETH and Terrorism Claims

The dispute escalated after blockchain forensics firms linked the exploit to North Korea’s Lazarus Group. These findings came from analytics firms and external forensic research. However, neither the Arbitrum governance process nor the court has legally confirmed that attribution. Lawyers representing families with $877 million in unpaid U.S. terrorism judgments cited the forensic reports. They argue that if authorities link the assets to North Korea, creditors could seek enforcement.

Aave contests that claim and argues that the ether belongs to users harmed in the exploit. The company states that attackers only briefly controlled the assets during the incident. Therefore, Aave maintains that victims, not external creditors, should receive the recovered funds. The disagreement centers on whether courts can treat the ETH as property linked to North Korea. The case continues in parallel with the governance vote process.

In a separate lawsuit, some of the same creditors sued Railgun DAO. They allege that the privacy protocol allowed North Korean-linked funds to move through its infrastructure. The complaint claims Railgun DAO failed to freeze those assets when required. That case forms part of a broader legal effort targeting decentralized finance platforms. Meanwhile, Arbitrum token holders will open voting on the AIP on May 15.

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