Binance has asked the Arbitrum DAO to release 8,425.997 ETH and 74.56 million ARB tokens that were frozen after its hot-wallet security breach. The request, submitted on November 5, starts a governance process that Binance expects to take around seven weeks or longer.
Summary
- Binance wants the frozen ETH and ARB returned without asking the DAO for new treasury funds.
- ARB tokenholders and delegates must approve the release through Arbitrum’s governance process.
- Binance plans to reopen withdrawals for more assets gradually after security checks.
- The exchange removed API keys connected to SignalPlus after the platform reported a possible security issue.
Binance submitted its proposal through its Binance_Post_Listing forum account, asking Arbitrum tokenholders to approve the return of the frozen assets. The funds are currently held at a separate frozen address. Before they can be released, the proposal must pass through forum discussions, a Snapshot vote and a final onchain governance vote.
Binance said it would cover customer losses through its Secure Asset Fund for Users (SAFU) and company treasury. If the frozen assets are recovered, they could help cover losses and expenses from the incident, including money already used to compensate affected customers.
The request follows an emergency action by Arbitrum’s Security Council on October 30. The council froze the assets at 8:08 a.m. Hong Kong time, which was the evening of October 29 in the United States.
To carry out the freeze, the council temporarily changed Arbitrum’s Inbox contract on Ethereum. This allowed it to move the assets from an address linked to the exploit into a separate frozen address. After completing the transfer, it restored the contract to its original version.
The council said no other users’ funds or applications were affected. It also confirmed that the frozen assets could only be moved again with approval from Arbitrum DAO governance.
Binance’s recovery plan would use a similar technical process. If the proposal passes, a temporary change to the Inbox contract would allow the funds to move to Binance’s designated recovery address. The temporary function would then be removed.
Binance stressed that it is asking for the return of assets already frozen on the network, not a new allocation from the DAO treasury. The only expected expense for the DAO would be the normal costs of carrying out the governance process.
The exchange expects the approval process to take around 49 days. Its proposed timeline includes one week for forum discussions, another week for an initial temperature check and two weeks for the formal onchain vote. If approved, it expects another 18 days before the funds are transferred.
Under Arbitrum’s constitution, a formal onchain proposal needs at least 1 million delegated ARB. A three-day waiting period follows before voting begins. Voting normally lasts 14 days, although it can be extended if the required participation level is reached near the end.
The proposal needs more votes in favor than against and must also meet the required participation threshold. For constitutional proposals, the threshold is half of all delegated voting tokens, with a minimum of 150 million ARB and a maximum of 450 million ARB.
Even after approval, additional waiting periods apply on Arbitrum and Ethereum before the transfer can be completed.
Legal issues could also delay the recovery. The proposal says the transfer cannot proceed if an active court order, restraining notice or other legal action blocks the release, unless a court with proper authority allows it.
Binance has also agreed to keep any recovered assets separate at its designated address while legal claims remain unresolved. The exchange would handle competing claims at its own expense.
Before submitting the final onchain proposal, Binance must also sign agreements protecting the Arbitrum Foundation, Offchain Labs and Security Council members against certain legal claims connected to the freeze and release. These agreements would follow New York law, with disputes handled by courts in New York County.
Alongside the recovery request, Binance announced that withdrawals for more assets would begin reopening from 04:00 UTC on November 5. The affected assets cover several networks, including Ethereum, BSC, Base, Tron, Polygon and Sui.
The exchange said withdrawals would return gradually as each asset and network passed security checks. Deposits remain available, but Binance warned that heavy demand could cause temporary withdrawal delays. It is prioritizing assets based on customer demand over the previous week.
In a separate announcement on November 5, Binance said it had removed all API keys connected to SignalPlus after the third-party platform reported a possible security problem.
Binance said its own systems were not affected and customer funds remained safe. It advised SignalPlus users to check their positions and open orders directly through Binance, wait until the platform confirms the issue has been resolved before reconnecting their API keys, and enable IP whitelisting for added security.