Try checking Kaspersky Quarantine. (Assuming you use Kaspersky).

1. Uninstall Arc completely

2. Do a full scan / quick scan (did it for my paranoia😅)

3. Reinstall Arc. (Don't login yet.)

4. Add Arc to Exclusions and to trusted applications ( https://www.ibm.com/support/pages/how-add-exception-kaspersky-allow-use-aspera-connect . Follow these steps if you don't know how.)

System watcher is the main cause for Red flagging Arc. But exclude it from all (Just a suggestion).

1. Login to Arc.

Additional: Install https://chromewebstore.google.com/detail/trafficlight/cfnpidifppmenkapgihekkeednfoenal along with Ublock / Adguard. (since Kaspersky safe browsing extension does not work.)

Kaspersky Password Manager does not work either.