{"id":72275,"date":"2026-05-09T14:41:50","date_gmt":"2026-05-09T14:41:50","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/judge-clears-71m-eth-transfer-to-aave-as-rseth-recovery-enters-final-phase-bitcoin-news\/"},"modified":"2026-05-09T14:41:50","modified_gmt":"2026-05-09T14:41:50","slug":"judge-clears-71m-eth-transfer-to-aave-as-rseth-recovery-enters-final-phase-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/judge-clears-71m-eth-transfer-to-aave-as-rseth-recovery-enters-final-phase-bitcoin-news\/","title":{"rendered":"Judge Clears $71M ETH Transfer to Aave as rsETH Recovery Enters Final Phase \u2013 Bitcoin News"},"content":{"rendered":"<p><b>(Originally posted on : Bitcoin News )<\/b><br \/>\n<\/p>\n<div>\n<p><span style=\"font-weight:400\"><\/p>\n<div class=\"@container mb-[25px] rounded-sm overflow-clip py-0.5 pr-0.5 pl-2.5 bg-success-100\">\n<div class=\"flex flex-col gap-m overflow-clip rounded-[6px] !bg-success-10 p-3 @[420px]:p-m\">\n<ul class=\"m-0 flex list-none flex-col gap-m pl-0\">\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Judge Garnett cleared 30,765 ETH ($71M) for transfer to Aave\u2019s wallet on May 9, 2026.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">The April 18 KelpDAO exploit saw attackers borrow $230M in ETH using unbacked rsETH collateral.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Aave\u2019s ETH LTV ratios are returning to normal as rsETH bridge recapitalization begins.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<p><\/span><\/p>\n<h2><span style=\"font-weight:400\">Recovery Efforts Garner Further Momentum<\/span><\/h2>\n<p><span style=\"font-weight:400\">Judge Margaret Garnett issued an order on May 9 modifying a prior asset freeze, permitting the Arbitrum Security Council to transfer approximately 30,765 <span>ETH<\/span>, valued at roughly $71 million, to an Aave LLC-controlled wallet address. The ruling also shields participants in the onchain governance vote that authorized the transfer from legal liability under the prior restraining notice, removing the last major hurdle in a recovery process that began in April.<\/span><\/p>\n<figure id=\"attachment_812747\" aria-describedby=\"caption-attachment-812747\" style=\"width:736px\" class=\"wp-caption aligncenter\"><figcaption id=\"caption-attachment-812747\" class=\"wp-caption-text\">Image source: X<\/figcaption><\/figure>\n<p><span style=\"font-weight:400\">The crisis traces back to April 18, when attackers <a href=\"https:\/\/news.bitcoin.com\/certik-analyst-kelpdao-exploit-reveals-high-stakes-shift-in-cross-chain-cybercrime\/\">exploited a vulnerability<\/a> in KelpDAO\u2019s cross-chain bridge, using unbacked rsETH tokens as collateral on Aave V3 markets to borrow an estimated $230 million in <span>ETH<\/span> from the protocol.<\/span><\/p>\n<p><span style=\"font-weight:400\">The Arbitrum Security Council froze the 30,765 <span>ETH<\/span> that remained locked in the bridge immediately after the exploit as a protective measure. As <a href=\"https:\/\/news.bitcoin.com\/incident-report-llamarisk-aave-service-providers-detail-kelp-rseth-hack-across-ethereum-and-arbitrum-markets\/\">detailed earlier<\/a><\/span><span style=\"font-weight:400\">, the attack set off one of the most sweeping and coordinated recovery efforts in <span>decentralized finance<\/span> ( <span>DeFi<\/span>) history.<\/span><\/p>\n<h2><span style=\"font-weight:400\">The Lazarus Group Involvement <\/span><\/h2>\n<p><span style=\"font-weight:400\">A major legal complication arrived when attorney Charles Gerstein, representing families holding approximately $877 million in unpaid terrorism judgments against North Korea, moved to block the <span>ETH<\/span> transfer. <\/span><span style=\"font-weight:400\">Gerstein argued the frozen funds were <a href=\"https:\/\/news.bitcoin.com\/zachxbt-law-firm-lazarus-group-frozen-funds\/\">eligible for seizure<\/a> because the April exploit has been widely attributed to the Lazarus Group, a North Korean state-backed hacking collective. <\/span><\/p>\n<p><span style=\"font-weight:400\">The claim created serious uncertainty around whether the Arbitrum <span>DAO<\/span>\u2019s onchain governance vote, which passed with over 90% approval, could be legally executed without exposing participants to liability.<\/span><\/p>\n<p><span style=\"font-weight:400\">Judge Garnett\u2019s ruling resolves that standoff as her order modifies the restraining notice to allow the <span>ETH<\/span> transfer to Aave LLC\u2019s address, and explicitly protects voters and operators involved in executing the governance decision from personal legal exposure under the existing freeze.<\/span><\/p>\n<p> <!-- --> <\/p>\n<p><span style=\"font-weight:400\">With the legal pathway clear, the next step in the recovery plan involves using the released <span>ETH<\/span> to back the rsETH bridge, restoring the 1:1 ratio between rsETH and the underlying <span>ETH<\/span> collateral that was disrupted in the attack. Aave co-founder Stani Kulechov confirmed on May 9 that <span>ETH<\/span> loan-to-value (LTV) ratios on the Aave protocol are already in the process of returning to normal parameters.<\/span><\/p>\n<p><span style=\"font-weight:400\">As <a href=\"https:\/\/www.bitcoin.com\/\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">Bitcoin.com<\/a> News reported in the aftermath of the incident, five major <a href=\"http:\/\/www.bitcoin.com\/get-started\/what-is-defi-decentralized-finance\/\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">DeFi<\/a> protocols <\/span><a href=\"https:\/\/news.bitcoin.com\/five-major-defi-protocols-ask-arbitrum-dao-to-free-30765-eth-locked-after-rseth-bridge-bug\/\"><span style=\"font-weight:400\">petitioned the Arbitrum DAO<\/span><\/a><span style=\"font-weight:400\"> to release the frozen <a href=\"https:\/\/branch.wallet.bitcoin.com\/news-contextual-eth\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">ETH<\/a>, while <a href=\"http:\/\/www.bitcoin.com\/get-started\/what-is-defi-decentralized-finance\/\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">DeFi<\/a> United, a coalition formed specifically to address the crisis, raised $160 million to help <\/span><a href=\"https:\/\/news.bitcoin.com\/defi-united-secures-160m-as-industry-moves-to-cover-aave-bad-debt-crisis\/\"><span style=\"font-weight:400\">cover Aave\u2019s bad debt position<\/span><\/a><span style=\"font-weight:400\">. <\/span><\/p>\n<\/div>\n<p><a href=\"https:\/\/news.bitcoin.com\/aave-rseth-recovery-judge-arbitrum-71-million-eth\/\">Source link <\/a><br \/>\n<br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Originally posted on : Bitcoin News ) Judge Garnett cleared 30,765 ETH ($71M) for transfer to Aave\u2019s wallet on May 9, 2026. The April 18 KelpDAO exploit saw attackers borrow $230M in ETH using unbacked rsETH collateral. Aave\u2019s ETH LTV ratios are returning to normal as rsETH bridge recapitalization begins. Recovery Efforts Garner Further Momentum [&hellip;]<\/p>\n","protected":false},"author":3947362404,"featured_media":72276,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[32],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/72275"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/3947362404"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=72275"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/72275\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/72276"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=72275"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=72275"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=72275"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}