Arbitrum’s Security Council Can Move a Wallet’s Funds Without Its Key, Binance Freeze Shows

Arbitrum's Security Council demonstrated it can move a wallet's funds without the holder's private key after freezing 8,426 ETH and 74.6 million ARB on Oct. 30, an action tied to a Binance-related freeze. A Nov. 2 walkthrough posted on Ethereum Magicians traced how the council executed the transfers in the holder's name, revealing that the multisig-based council can effectively control balances at the wallet level. The episode highlights a key trust assumption in Arbitrum's governance design: the Security Council's emergency powers extend beyond pausing contracts to directly redirecting user assets. The amounts involved are significant — roughly $28 million in ETH and $30 million in ARB at recent prices — putting the total near $58 million. Market participants should watch whether the affected party challenges the freeze, whether Binance clarifies its role, and whether the disclosure prompts scrutiny of Security Council powers across Arbitrum DAO governance debates.