Chibi Finance has become the latest protocol to rug-pull users on the Arbitrum blockchain.
Developers of a new Arbitrum protocol Chibi Finance appear to have rug-pulled users for roughly $1m in ether (ETH), adding to the list of exit scams that have hit the Arbitrum ecosystem this year.
Chibi Finance Token Crashes by Almost 100%
Blockchain security platform CertiK explained that the Chibi Finance contract, deployed only for 10 ETH, had a backdoor which allowed the developers to withdraw funds staked by users. Roughly 555 ETH, worth over $1m at the time of writing, were stolen from the contract, according to a separate analysis conducted by Peckshield. The funds were quickly bridged to Ethereum and transferred to Tornado Cash, a mixing protocol often used by criminals to launder ill-gotten proceeds. At the moment, the social media accounts of Chibi Finance have all been deleted, and even the official website is currently not available. The native token CHIBI, which previously traded around $1.50, has fallen by almost 100% to $0.01014069, per Coingecko data.
Rug Pull Scams are on the Rise
CertiK puts the Chibi Finance exit scam as the 12th case recorded on the Arbitrum blockchain this year. In May, developers of Arbitrum-based decentralised exchange Swaprum vanished with roughly $3m of the protocol’s liquidity. In March, A similar case involving a new protocol ArbiSwap, disappeared with about $130,000 of users’ funds. The Arbitrum blockchain, meanwhile, is not alone. Rug pull cases have been on the rise across other networks. Security firm Beosin reported earlier this month that losses due to rug pulls soared to over $45m in May, higher than the amount stolen from decentralised protocols through hacks.