Aave Challenges $71M Freeze, Seeking Fast Ruling to Restart Restitution for Users

Key Takeaways:

• Aave filed a May 4 motion to vacate a court order freezing $71 million in ETH recovered from a recent exploit.
• ZachXBT alleged the freeze involves fraudulent claims, impacting trust across the Arbitrum DAO ecosystem.
• Aave seeks an expedited hearing and demands that the plaintiffs post a $300 million bond to maintain the freeze.

Emergency Motion Filed to Unfreeze Assets

Decentralized finance protocol Aave filed an emergency motion on May 4 to vacate a restraining notice that froze approximately $71 million in recovered Ethereum intended for victims of a recent security exploit. The legal action follows a May 1 restraining notice served on Arbitrum DAO, which stalled the distribution of funds recovered after an April 18 exploit.

According to a statement by Aave on social media, the frozen assets belong to users victimized in the breach.

“A thief does not gain lawful ownership of stolen property simply by taking it, and the law is clear on this,” Aave stated. “Those assets were recovered to be returned to users victimized in the April 18, 2026, exploit. Freezing them harms the very people this recovery effort is designed to protect.”

Aave requested an expedited hearing and a temporary vacatur from the court to resume the restitution process. The company is reportedly working with the Arbitrum community and DeFi United to ensure affected users are made whole.

The April 18 exploit resulted in the loss of millions in digital assets, prompting an industrywide recovery effort. While the funds were successfully intercepted, the current legal gridlock threatens to delay the return of capital to thousands of decentralized finance participants.

Following the court’s granting of the freeze order, online sleuth ZachXBT accused U.S. law firm Gerstein Harrow LLP of filing a fraudulent claim. He alleged the law firm uses this tactic each time there is a new Lazarus Group victim after an exploit and crypto assets are frozen.

In its motion, Aave said that if the court does not immediately vacate the restraining notice, it should schedule an expedited briefing and hearing for Aave’s emergency application. Additionally, Aave is asking the court to require the plaintiffs to immediately post a cash bond of at least $300 million as a condition for maintaining the restraining notice.