In what appears to be another rug pull in the decentralized finance (DeFi) space, the team behind Chibi Finance has absconded with more than $1 million worth of various assets. Following the protocol’s launch earlier today, users’ funds were swiftly transferred to an Ethereum address and converted to Ether.
A “rug pull” is a term used to describe a type of crypto scam where a developer – or a team of developers – builds the reputation of a project and generates huge funds with it by “hyping it” or creating enthusiasm in a community. Then, the developers drain liquidity from the project’s tokens immediately after launching, leaving investors emptied.
Chibi Finance Team Steals 555 ETH From Users
The developers of Chibi Finance, a supposed yield-optimization protocol built on the Arbitrum chain, have disappeared with over $1 million worth of users’ funds. This rug pull operation was possible as the Chibi team deployed a malicious contract that enabled them to seize the funds from the protocol’s smart contract, according to security firm CertiK.
1/ The @Chibi_Fi exit scam is the 12th incident we have recorded on Arbitrum in 2023.
— CertiK Alert (@CertiKAlert) June 27, 2023
The assets were then withdrawn from Chibi Finance’s liquidity pools on the Arbitrum chain and sent to the Ethereum network, where it was swapped for Wrapped Ethereum (WETH). These stolen funds, sold for 555 ETH, were transferred to Tornado Cash, a decentralized cryptocurrency exchange.
Chibi Finance is supposed to be a DeFi protocol that allows users to stake their tokens and automatically earn rewards. However, the digital presence of Chibi Finance has vanished since the occurrence of this scam. The protocol’s social media accounts and official website are no longer accessible.
According to data from Certik, this Chibi Finance rug pull is the 12th incident reported on the Arbitrum network in 2023.
CHIBI Token Falls By Nearly 100% Following Rug Pull
After the rug pull, CHIBI – the native token of Chibi Finance – has plunged by 99.4%, according to CoinGecko Data. The coin opened trading at $1.62 less than 24 hours ago. As of this writing, the CHIBI token is valued at $0.0101445.
According to a blockchain security firm Beosin report, losses from rug pulls and exit scams in the crypto market outweighed those from DeFi attacks in May. Six rug pull incidents – resulting in a $45.02 million loss – were recorded in May, while 10 DeFi protocol hacks amounted to a $19.7 million deficit.
To avoid falling victim to these crypto scams, investors should increase their awareness and do their due diligence before risking their funds in the cryptocurrency market.