If you look closely, that doesn't look like arcing. That used to be a spider. Clean him off.

What even is this thing? Everyone in here talks about as if they knew, but it looks entirely unfamiliar to me.

The similar one I had only lasted about a year. The contact rings shown in your picture corrode and make intermittent contact for charging. Then the battery gives out and won't hold a charge.

Frankly, I'd dump it and get a cheap candle warmer and a flat-bottom mug. That's what I've been using for two years.

i guess they had a good reason to call their company Ember...

A fire is way more expensive though.
If you need to keep something hot, just get something like a zohirushi mug.
It's so well insulated that I have to dump an ice cube in it otherwise it's stays too hot for too long.
No batteries, no gimmick. Mine is 11 years and still kicking.

Ember technologies Inc, that's a big example of nominative determinism

Show us the wall wart side where it says the voltage that it charges at, it's likely you had something there that acted as a conductor and normally there's not really a risk of shorting. If you want to try again, Clean as much charring away as you can, since it might be a better conductor than the mug material that gap distance was designed for. I would scrape away all the black, use an exacto or razor blade to cut a little more, then fill it with a little bit of 5 minute epoxy or superglue or something.

This is all assuming the voltage and amperage across that gap isn't all that high. Do you think it's likely a drop of water or something got in there as you went to charge it?

clean it out with a cotton bud and sone isopropyl alcohol. If there's still scorches/carbonized plastic after cleaning, not worth the risk ( the carbon will act as a short payh for future arcing)

Those two metal rings are the line voltage, and the return. It looks like there was some animal stuck between then and didn't survive it. I would t commend trying to unplug and clean it up. If the plastic looks deformed it would be time time to look for a new one. It's not generally dangerous in this case, but your missing isolation and that might come back and bite you

Clean the char off and see if it works. Provided you get all that conductive carbon removed, and there isn't anything damaged internally then I don't see why it wouldn't work. Definitely don't leave it plugged in unsupervised for a while though.

I would not use this at all, as you said, fire hazard.

you crazy

that is a fire hazard lol

It really doesn't look like arcing to me.

can you? sure!

should you? probably not.

let me ask this question, do you have good fire insurance?

See if you can't return it for a new one.