A US judge postponed hearing on Aave's application to unfreeze $71 million worth of stolen ETH.

According to Mars Finance, on May 14th, New York Judge Margaret M. Garnett postponed her ruling on Aave's emergency motion to unfreeze $71 million in ETH related to the Kelp DAO hack, requiring both parties to submit supplementary statements before a hearing on June 5th. Aave is attempting to recover the $71 million in ETH frozen by Arbitrum to assist in asset recovery efforts following the hack—the Kelp DAO hack resulted in losses of up to $293 million, one of the most serious security incidents in the DeFi space this year. However, the US law firm Gerstein Harrow LLP filed a restraining order in early May, asserting its clients' rights to the funds. Aave subsequently filed an emergency motion to lift the freeze, warning that failure to release the funds promptly would trigger user liquidations and potentially impact the entire DeFi market. In her ruling, Judge Garnett noted that Aave failed to adequately explain how user funds would suffer "compound interest losses" if the restraining order remained in place. She acknowledged the complexity of the case and the risks faced by the victims, requesting supplementary statements from both parties on six key issues, including: whether the hacked transactions were subject to New York State asylum principles, the legal distinction between fraud and theft, the hacker's rights to the stolen assets, the applicable legal precedent for freezing assets, whether a presumed trust is an appropriate remedy, and whether Aave or Arbitrum can identify individual victims and return assets proportionally. Both parties must submit supplementary statements by May 22nd. Meanwhile, the overall compensation process for Kelp DAO is progressing. Kelp and Aave announced on Tuesday that the hacker's rsETH had been destroyed on Arbitrum, and approximately $278 million worth of lost tokens will be recovered within the next two weeks through funds in the Aave Recovery Guardian multisignature wallet. Once the relevant smart contracts are reactivated, all functions of rsETH will be restored.