Arbitrum’s Watchdog Committee has given three DeFi projects until a tentative Sept. 10 deadline to respond to high-severity misuse findings and return funds the committee considers unresolved. If they do not, each project could face a separate vote on permanent exclusion from future Arbitrum DAO programs.
The cases involve Good Entry, Limitless and APX Finance, formerly ApolloX. Their cited figures add up to 457,553 ARB, but that total mixes different findings. It is not one established amount that was stolen, outstanding or recoverable.
As of Sept. 5, none of the projects had replied in the proposal thread. The committee called the schedule tentative and said a vote would happen only if a project’s explanation is unsatisfactory and its funds are not returned within the one-week window. No ban has been approved so far.
What the committee alleges
For Good Entry, the committee said on-chain analysis found 142,839 ARB distributed to 1,032 ineligible users during and after the Short-Term Incentives Program. It also alleged self-farming by wallets connected to team addresses and said the project refused to clarify. Good Entry’s grant application requested 200,000 ARB, so the watchdog figure covers part of the grant and describes distributions rather than a remaining balance.
Limitless is accused of swapping 75,000 ARB into USDC and moving the funds to Base. The watchdog said team members could not be reached for clarification or recovery. That figure matches the 75,000 ARB requested in Limitless’s LTIPP application.
The APX Finance finding is harder to reduce to a simple repayment amount. The committee linked 239,714 ARB to overlapping issues, including a substantial portion left unused in treasury addresses. It also cited late transfers to distributor contracts and alleged team-linked Sybil activity. APX had requested 525,000 ARB, but the proposal did not break down the 239,714 ARB by issue.
How the exclusion votes would work
Each project would face its own off-chain Snapshot vote. The proposal says a ban involving an operating project would cover founders, current team members and affiliated contributors. For projects no longer operating, the ban would apply only to founders.
These votes would seek social consensus and require no on-chain action. If passed, the projects or people covered would become ineligible for future programs run by the Arbitrum DAO. That makes the measure a governance-access sanction, not a wallet freeze or a switch that disables a protocol.
The watchdog said that, as of Sept. 2, the broader program had received 90 reports, recovered about 532,000 ARB and distributed about 268,000 ARB in reporter bounties. The next signal is whether any of the three projects answers before Sept. 10. After that, attention shifts to whether the committee follows its tentative Snapshot timetable.
