Chibi Finance, a recently launched DeFi project, has been accused of orchestrating a “rug pull” and disappearing with approximately $1 million in customer deposits. An on-chain investigation conducted by PeckShield revealed that 555 ether (ETH) from the platform’s liquidity pools has been stolen.
The Chibi Finance team allegedly converted tokens staked by users into Ether and then withdrew the funds. PeckShield discovered that the stolen money was transferred from the Arbitrum network to Ethereum and passed through Tornado Cash, a popular Ethereum mixing service designed to obscure transaction histories.
#PeckShieldAlert Seems like #Chibifinance rugged. ~$1M worth of cryptocurrencies were drained.
The stolen funds, which have been swapped for ~555 $ETH, were bridged from #Arbitrum to Ethereum.
They have already been transferred into Tornado Cashhttps://t.co/HmVeZmWJS4 pic.twitter.com/1wM8j86fS4— PeckShieldAlert (@PeckShieldAlert) June 27, 2023
Simultaneously, the online presence of the Chibi Finance team vanished. The project’s website, http://chibi.finance/, as well as its Twitter handle and Telegram social media profiles, are no longer accessible. All attempts to contact the project for comment have been unsuccessful.
The price of the tokens issued by the project, chibi, has experienced a sharp decline, according to data from DEX Screener. Yesterday, the tokens were valued at approximately $1, but they have now plummeted to just $0.017.
These recent events are part of a troubling trend of exit scams within the Layer 2 ecosystem, particularly on Arbitrum and Ethereum. Swaprum and Merlin are other examples of platforms that scammed their users.
Swaprum, a decentralized exchange(DEX) operating on the Ethereum Layer 2 network Arbitrum, allegedly absconded with approximately $3 million in user deposits. PeckShield conducted an on-chain analysis and determined that the platform’s liquidity pools were depleted by approximately 1,628 ETH, equivalent to $3 million.
Similarly, the Merlin DEX team also rug-pulled its users for $1.8 million on April 25, 2023, by exploiting centralized privileges within the protocol. Insiders from the Merlin team, who possessed access to private keys, abused the rights associated with the owners’ wallets to deceive customers. Fortunately, CertiK, a blockchain security company, collaborated with partners to successfully freeze $160,000 of the stolen assets.
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