Lawyers representing North Korean victims are attempting to redefine the April rsETH attack on Aave as "fraud" rather than "theft" ahead of a hearing in Manhattan federal court, in order to maintain the freeze on $71 million worth of ETH. The lawyers argue that the attackers borrowed assets using worthless collateral and failed to repay them, constituting fraudulent loan transactions intended to use the frozen assets to repay terrorism-related damages under the Terrorism Risk Insurance Act. Previously, hackers linked to the Lazarus Group minted unsecured rsETH through a cross-chain bridge vulnerability and lent approximately $230 million worth of assets on Aave, of which $71 million was intercepted by Arbitrum developers. The victims' lawyers also challenged Aave's standing, pointing to its terms of service which state it does not have control over user assets. Furthermore, DeFi United has raised $327 million, exceeding the amount in dispute.