Arbitrum's [ARB] Security Council has frozen 8,425 Ethereum [ETH] and 74.555 million ARB, worth $30 million, after voting to execute an emergency action that moved the funds out of an address identified in the Binance exploit. The action was taken on 30 October.
The network said no other users or applications were impacted by the move. Only an Arbitrum DAO governance vote can now release the frozen tokens.
How the freeze was executed
Arbitrum detailed a technical approach that upgraded the Inbox Contract to add a new function. That function imitated the structure of a standard cross-chain transaction, with the ability to impersonate the transaction sender.
A similar approach was used in the aftermath of the KelpDAO exploit in April, when the Council moved 30,766 ETH then worth $71 million.
The actions, though described as necessary, renewed debate about the true nature of Arbitrum's claim to decentralization.
Price action turns lower
ARB was down 4.5% in the past 24 hours, following a market-wide sell-off as Bitcoin [BTC] slipped below $77k once again. The slide below the $0.162 local low was a setback for swing traders and pointed to further losses, with the MACD on the verge of a bearish crossover just above the zero line on the weekly chart.
Still, the OBV has trended higher in recent months, mirroring the swing structure. Barring a massive sell-off, ARB holding above $0.11 is enough to keep long-term investors' bias comfortably bullish, according to the analysis.
On the daily timeframe, the swing structure remained bullish, anchored by the $0.131 low from which the October rally originated. However, the MACD was in a slump while the OBV moved listlessly sideways without a clear trend.
The altcoin may dip lower to sweep the $0.145 zone. Whether it can recover or continue its weekly timeframe retracement toward $0.141 and $0.110 remains to be seen.
Key takeaways
- The Arbitrum Security Council froze $30 million in ETH and ARB linked to the Binance exploit.
- Only an Arbitrum DAO governance vote can move the frozen funds.
- ARB's short-term price action was bearish, with $0.141 and $0.131 cited as possible downside levels in the coming days.
