Categories: FintTechMenafn

Chibi Finance Rugs $1 Million In Crypto From Arbitrum Users

Summary:

  • The Chibi Finance team disappeared overnight in what seems like a rug pull, PeckShield noted.
  • 555 Ether (ETH) worth around $1 million was drained from the project’s liquidity pools and deposited into the crypto mixer Tornado Cash.
  • The team’s social media accounts and websites also mysteriously vanished, leaving users with no access to the people behind the project.

Crypto project Chibi Finance which runs atop the Ethereum Layer 2 scaling protocol Arbitrum allegedly rugged its users and disappeared with around $1 million in Ether (ETH).

The project styled itself as a yield-optimizing protocol that allowed users to automatically rack up rewards after depositing their crypto tokens on the platform. The platform’s native token CHIBI tanked 98% in value following the incident.

Chibi Finance Team Goes AWOL

On-chain security firm PeckShield reported that the Chibi Finance team drained 555 ETH worth $1 million from the project’s liquidity pools.

https://twitter.com/PeckShieldAlert/status/1673615238758006786?ref_src=twsrc%5Etfw” rel=”nofollow noopener

According to another security startup CertiK, the developers were able to do this as they added malicious code in Chibi’s smart contract. This allowed the team to steal user funds after the contract was deployed and crypto investment poured in. The CertiK team noted that this is the 12th exit scam tracked so far in 2023.

After stealing the assets, the team moved funds from Arbitrum to Ethereum’s ecosystem. PeckShield said the 555 ETH was then deposited in the crypto mixing service Tornado Cash, an Ethereum-based platform used to obscure transactions.

The protocol is often used by crypto criminals to launder stolen wealth and was sanctioned by U.S. authorities last year due to suspicions that the North Korean hacker group Lazarus uses the service.

Community concerns over a rug pull increased after the Chibi Finance team scrubbed its digital presence following the asset drain. The project’s Twitter profile was deactivated and its website is unavailable. Crypto influencers like @defi_mochi also deleted their posts on the project.

A rug pull is a crypto-native term that refers to a specific type of scam where a project markets a service, builds a following or community that eventually invests in the project, and then disappears with the proceeds leaving users and investors with empty balances or worthless tokens.

Ryan Helton

A Stock enthusiast since childhood, Ryan is known for his impeccable knowledge in the technology and gadgets niche. He has been working with eTrendy Stock as a contributor for most stock category and his articles are always well-researched and accurate.

Recent Posts

Blenix Technology Launches Revolutionary Blockchain Ecosystem with BLX Token Presale

London, UK, 29th May 2025, ZEX PR WIRE, Blenix Technology, a global leader in innovative digital…

5 days ago

SX Bet Bets Big on Berachain: Bringing Web3 Sports Betting to Bera

Toronto, Canada, 29th May 2025, ZEX PR WIRE, SX Bet has officially launched on Berachain,…

5 days ago

Jessica Contreras Aims to Spark Tucson’s AI Revolution

Tucson, Arizona, 28th May 2025, ZEX PR WIRE, QUICK LOOK: Tucson native Jessica Contreras is turning her…

5 days ago

VEEPEEN Launches with Viral Momentum, Crosses 3,000 Holders Amid VEEPEEN Meme Surge

Perth, Australia, 28th May 2025, ZEX PR WIRE, The crypto world has a new viral…

6 days ago

Franck Muller Unveils Groundbreaking Collaboration with Solana: A Fusion of Swiss Craftsmanship and Blockchain Innovation

New York, May 23, 2025, At Solana Accelerate, Erol Baliyan, CEO of Franck Muller Middle…

1 week ago

Pepe Heimer Introduces AI-powered Yield Optimization and Launches PEHEM Token Presale

New York, USA, 23rd May 2025, ZEX PR WIRE, Pepe Heimer, a new memecoin merging…

1 week ago