Binance asked Arbitrum’s DAO on Nov. 5 to release 8,425.997 ETH and 74.56 million ARB frozen after its hot-wallet exploit, beginning a governance process the exchange expects to take seven weeks or longer.
Summary
- Binance seeks the return of frozen assets without requesting a new DAO treasury allocation.
- ARB tokenholders and delegates must approve the release through Arbitrum’s constitutional governance process.
- Additional asset withdrawals are scheduled to reopen progressively following security and readiness checks.
- Binance removed SignalPlus-linked API keys after the third-party platform reported a potential security issue.
Binance submitted the proposal through its Binance_Post_Listing forum account, asking tokenholders to authorize the return of assets immobilized on Arbitrum One. The funds remain at an intermediary frozen address, with forum discussion, a Snapshot temperature check, and a binding onchain vote still ahead.
The exchange said it would cover affected users’ losses through its Secure Asset Fund for Users, known as SAFU, and company treasury. Recovered assets could pay incident-related losses and costs, including replenishing reserves already used to compensate customers.
Binance recovery request follows Arbitrum’s emergency freeze
Arbitrum’s Security Council disclosed that it froze the assets at 8:08 a.m. Hong Kong time on Oct. 30, corresponding to the evening of Oct. 29 in the United States.
The council temporarily upgraded Arbitrum’s Inbox contract on Ethereum, enabling transactions that moved the assets from an address associated with the exploit into the frozen address. It then restored the contract’s original implementation.
According to the disclosure, no other users’ funds or applications were affected. The council said the frozen assets could only be moved through an Arbitrum DAO governance vote.
Binance’s proposed recovery would follow a similar technical sequence. An approved transaction would temporarily upgrade the Inbox contract, transfer the frozen balances to Binance’s designated recovery address, and remove the temporary function.
The request concerns assets already immobilized on the network. Binance expects no direct DAO budget expense beyond normal governance execution overhead.
ARB holders face a multistage approval process
Binance anticipates roughly 49 days for discussion, voting and execution, although the process could take longer.
Its schedule includes one week of forum discussion, a weeklong temperature check and a two-week onchain vote. Following approval, it expects approximately 18 more days before the transaction returning the funds executes.
Arbitrum’s constitution requires at least 1 million delegated ARB to formally submit an onchain proposal. A three-day waiting period precedes voting, which normally lasts 14 days and can extend if quorum is reached late.
Approval requires more votes in favor than against, alongside a participation requirement counting support and abstentions. For constitutional proposals, that threshold is half of delegated votable tokens, subject to a minimum of 150 million ARB and a maximum of 450 million.
Successful proposals must also clear waiting periods on Arbitrum and Ethereum, with message finalization through the rollup’s challenge period between them.
Legal claims could delay the asset transfer
The draft would prevent onchain submission and delivery while a restraining notice, writ, court order or other legal process blocking the transfer remains effective, unless a competent court permits those steps.
Binance also agrees to hold delivered assets separately at the recovery address while any such process remains unresolved and to defend competing claims at its own expense.
Before onchain submission, the exchange must sign indemnification agreements covering the Arbitrum Foundation, Offchain Labs, and Security Council members.
The agreements would be governed by New York law, with disputes assigned to state and federal courts in New York County. Those provisions address potential liabilities surrounding both the original freeze and the proposed release.
Binance expands withdrawals and removes SignalPlus connections
Alongside the recovery request, Binance’s eighth recovery update scheduled additional withdrawals to begin reopening from 04:00 UTC on Nov. 5.
The list covers selected assets on Ethereum, BSC, Base, Tron, Polygon and Sui. Binance said availability would return progressively as each asset and network combination passed security checks. Deposits remain open.
The exchange is prioritizing tokens based on demand over the preceding week and warned that traffic could cause temporary delays.
In another Nov. 5 announcement, Binance said it removed all API keys linked to SignalPlus after the third-party platform reported a potential security issue. Binance said its own systems were unaffected and user funds remained safe.
It advised SignalPlus users to review positions and open orders directly through Binance, await confirmation of resolution before reconnecting API keys, and enable IP whitelisting.
