BlockBeats News, May 14th, New York judge Margaret M. Garnett on Wednesday postponed the ruling on Aave's emergency application aimed at unfreezing $71 million ETH related to the Kelp DAO hack, and requested both parties to submit supplemental briefs before the hearing on June 5th. Aave is seeking to recover the frozen $71 million ETH on Arbitrum to assist in the asset recovery efforts related to the recent hacker incident—the hack on Kelp DAO resulted in a loss of up to $293 million, making it one of the most serious security events in the DeFi space this year. However, the U.S. law firm Gerstein Harrow LLP filed a restraining order with the court in early May, claiming that its client has rights to the aforementioned funds. Aave subsequently filed an emergency motion to lift the freeze and warned that failure to release the funds promptly would trigger user liquidations and potentially impact the entire DeFi market.

In her ruling, Judge Garnett pointed out that Aave had failed to adequately explain how user funds would suffer "compounding losses" if the restraining order remained in place. She also acknowledged the complexity of the case, the risk faced by the victims, and asked both parties to provide supplemental statements on six key issues, including: whether the hacker attack transactions are governed by New York's shield principles, the legal distinction between fraud and theft and what rights the hacker has to the stolen assets, which law applies to determine the priority of the frozen assets, whether the presumption of trust is an appropriate remedy, and whether Aave or Arbitrum can identify individual victims and proportionally return the assets. Both parties must submit supplemental briefs by May 22nd.

Meanwhile, the overall compensation efforts for Kelp DAO are progressing. Kelp and Aave announced on Tuesday that the hacker's holdings of rsETH have been destroyed on Arbitrum, and approximately $278 million in lost tokens will be recovered through the funds of the Aave Recovery Guardian multisig wallet in the next two weeks. Once the relevant smart contracts are reactivated, rsETH's full functionality will be restored.