Chibi Finance, a yield optimization protocol based on the Arbitrum chain, has disappeared after approximately $1 million in user funds was withdrawn from its liquidity pools. This incident marks the twelfth attempt by Arbitrum to defraud its customers within the last six months.
The rug-pull operation was executed through the use of a malicious contract that allowed developers to seize funds from the protocol's smart contract. The said contract was originally initiated by a 10 ETH withdrawal on Twister Money. Subsequently, the CHIBI provider gave the malicious contract the "_gov" position to obtain administrator rights over a computer network, enabling the contract to execute the "panic" operation on the protocol. Following this, the contract moved the stolen crypto back to the EOA address.
The stolen funds were sold for 555 ETH and transferred to Tornado Cash, a decentralized exchange. As a result, the CHIBI token plummeted by 98% within hours of the pull, and the Twitter account and website have vanished.
The coin's trading began less than 24 hours ago at $1.62, and at the time of writing, the price of CHIBI is $0.00957537.
According to blockchain security company Beosin, losses from rug-pulls and exit scams in the market outweighed losses from DeFi attacks in May. Six rug-pull incidents were recorded in May, resulting in a loss of approximately $45.02 million. On the other hand, DeFi protocol hacks incurred a loss of around $19.7 million.
To avoid falling victim to these crypto scams, investors should exercise caution and due diligence before investing their money in the cryptocurrency market.
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