Arbitrum DAO's Watchdog Committee Targets Three DeFi Projects for Possible Exclusion

The Arbitrum DAO's Watchdog Committee has issued a warning to three DeFi projects—Good Entry, Limitless, and APX Finance—regarding serious allegations of misuse of funds. The committee has set a tentative deadline of September 10 for these projects to address the findings and return the funds deemed unresolved, or they will face separate votes on permanent exclusion from future DAO programs.

Each project has been cited for various infractions that have raised concerns about their operations. Good Entry is accused of distributing 142,839 ARB tokens to ineligible users and engaging in self-farming activities linked to team wallets. Limitless allegedly swapped 75,000 ARB for USDC and transferred the funds to another blockchain, with the committee noting that team members were unreachable for clarification. APX Finance's situation is more complex, with 239,714 ARB tied to multiple issues, including unutilized funds in treasury addresses and late transfers.

The committee has clarified that a vote for exclusion will only occur if the projects fail to provide satisfactory explanations or do not return the funds within the one-week window. The proposed bans would affect not only the projects themselves but also their founders and team members, making them ineligible for future programs run by the Arbitrum DAO.

As of September 2, the broader program had received 90 reports, recovered about 532,000 ARB, and distributed approximately 268,000 ARB in bounties to reporters. The next significant development will be whether any of the three projects respond before the deadline, followed by the committee's decision on whether to proceed with the proposed votes.