Binance filed a draft Constitutional Arbitrum Improvement Proposal on Nov. 5 seeking the return of 8,425.997 $ETH and 74.56 million $ARB frozen after its hot-wallet exploit. The request puts the release of those assets before $ARB tokenholders and their delegates.
The funds remain in Arbitrum's intermediary frozen address on Arbitrum One and have not been returned to Binance. The proposal is at the forum-discussion stage, with a Snapshot temperature check and binding onchain vote still ahead. Binance estimates the process will take roughly seven weeks or longer.
The requested $ETH and $ARB were worth about $19.6 million and $11.7 million, respectively, at CoinGecko prices around 10:04 a.m. ET on Nov. 5, according to The Defiant's calculations.
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Binance says it will cover affected users' losses through its SAFU fund and treasury. The proposal would allow returned assets to cover incident-related losses and costs, including replenishing those reserves if already used to compensate customers. It requests no new allocation from the DAO treasury.
From Emergency Freeze to DAO Vote
The Security Council's disclosure says it temporarily upgraded an Ethereum contract used to send cross-chain transactions, used it to move funds out of the address linked to the exploit, then restored the original code. The emergency freeze took place on Oct. 29 ET.
Releasing the assets would require a similar temporary upgrade, this time authorized through DAO governance, to transfer them to Binance's designated recovery address. Arbitrum has said the frozen funds can only be moved by a DAO governance vote.
Under Arbitrum's constitution, the council can act without delay in a true security emergency if nine of its 12 members approve. Forum discussion and a temperature check are recommended rather than mandatory for DAO proposals; Binance's plan includes a week for each. The Snapshot poll is decided by a simple majority without a participation threshold.
Formal onchain submission requires a proposer with at least 1 million delegated $ARB, followed by a three-day wait before voting starts. The vote runs for 14 days, with a possible extension of up to two days if quorum is reached late. Approval requires more votes for than against, plus a quorum counting votes for and abstentions: half of delegated votable tokens, bounded by a floor of 150 million and a ceiling of 450 million $ARB.
A successful proposal must then pass an eight-day Layer 2 waiting period, message finalization through the rollup's challenge period, and a further three-day waiting period on Ethereum before execution.
Legal conditions could extend that schedule. Under the draft, transfer-blocking legal process would halt onchain submission and delivery unless a court permits them. Before onchain submission, Binance must sign indemnification agreements with the Arbitrum Foundation, Offchain Labs and Security Council members. It also agrees to hold delivered assets separately at the recovery address until any such legal process is resolved.
