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As the crypto landscape expands and evolves, so do its challenges. One recent incident that has rocked the crypto sphere involves the much-publicized scam by Chibi Finance, an Arbitrum-based protocol. A calculated deception masterminded by the platform’s developers allegedly resulted in the theft of more than a million dollars worth of diverse crypto assets.
Launching into operation on a Tuesday, Chibi Finance quickly spiraled into infamy when its developers reportedly funneled purloined funds across various networks within a strikingly brief timeframe. The startling swiftness of their actions highlighted the relative ease with which such malicious activities can be executed in the largely unregulated crypto market.
Insights drawn from on-chain analysis by CertiK, a leading blockchain security platform, shed light on the mechanisms of this digital daylight robbery. It was reported that Chibi developers had surreptitiously integrated a malevolent contract into their platform. This cunning piece of coding allowed them to plunder funds from unsuspecting users through the protocol’s smart contracts.
The siphoned funds transformed, and traded for 555 Ether, before journeying from Arbitrum to Ethereum on the same day, according to security firm PeckShield. These stolen funds were then channeled to Tornado Cash, a popular coin mixing service. The aim? To muddy the transaction trails and, consequently, obscure their illegitimate origins.
After pulling off the heist, the developers didn’t hesitate to wipe off their digital footprints. Chibi Finance’s social media presence on Twitter and Telegram promptly vanished, and the platform’s website was scrubbed from the internet, leaving behind nothing but a sense of betrayal among its users.
This scandal is far from being an isolated incident. CertiK reports that Chibi’s exit scam is the 12th case on the Arbitrum platform in 2023 alone. The recurring nature of these incidents raises serious questions about the security measures across the Ethereum Layer 2 ecosystem.
The surge in fraudulent activities doesn’t end with Chibi Finance. Swaprum, another decentralized exchange, recently fell victim to similar machinations, losing $3 million worth of Ether.
A shocking report by Beosin suggests that the amount lost to exit scams and rug pulls surpassed the financial losses experienced by decentralized finance projects through attacks and exploitations in the previous month. Crypto assets totaling over $45 million were swindled through six rug pull incidents in May alone, while other DeFi exploits accounted for losses of $19.6 million.
The post Chibi Finance Is The Latest DeFi Rug Pull Plaguing Arbitrum appeared first on CryptoMode.
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