A federal judge in Manhattan has tweaked a restraining notice that was keeping roughly $71 million in recovered Ethereum tied up. The modification clears a procedural path for Arbitrum DAO to vote on sending the funds to Aave LLC. But the freeze itself stays in place for now.
The Kelp DAO Bridge Exploit
The money in question came from a bridge exploit that hit Kelp DAO on April 18. An attacker drained funds, and investigators later recovered that chunk of ETH. Exactly how the recovery happened isn't spelled out in court records, but the judge's order refers to the stash as "recovered ETH."
What the Modification Changes
Before the change, the restraining notice effectively blocked any movement of the recovered assets. Now the language has been loosened just enough to let Arbitrum DAO hold a vote. If the DAO approves, the $71 million in ETH can be transferred to Aave LLC. That company is a separate legal entity tied to the Aave lending protocol.
The court didn't rule on the merits of the transfer. It just removed a procedural barrier. The DAO still has to decide whether to move the funds.
Funds Still Frozen for Now
Don't expect the ETH to hit a wallet anytime soon. The freeze carries over despite the modification. So even if the DAO votes yes, the cash won't actually leave its current holding spot until the court lifts the freeze entirely. That's a separate step that hasn't happened yet.
What's next? Arbitrum DAO will schedule a vote. No date has been set. Until then, the $71 million sits in legal limbo.
