Chibi Finance rug pull on Arbitrum: $1 million disappear
Chibi Finance, a decentralized finance (DeFi) project based on the Arbitrum Layer-2 blockchain, has vanished with $1 million, in what appears to be a potential rug pull.
Recently launched on the Arbitrum Layer-2 network, Chibi Finance is said to have drained its liquidity pool and disappeared with 555 Ethereum (ETH), which at current market prices amounts to user deposits worth approximately $1 million.
According to a warning from blockchain security and data analysis company PeckShield, the Chibi Finance team performed a token rug pull by converting them into ETH and then funneling them into the Ethereum network via the crypto mixing service Tornado Cash.
In addition, the Chibi Finance team is reportedly “missing,” as the DeFi project’s social media accounts on Twitter and Telegram have been deleted. The platform’s website is also offline.
This apparent heist by Chibi Finance adds to the recent flood of bad actors in the Arbitrum Ethereum ecosystem. In April, the zkSync project Merlin allegedly absconded with $2 million from its users. Meanwhile, in May, Arbitrum-based company Swaprun vanished, resulting in nearly $3 million of user funds being stolen in another rug pull.
As news of the incident spread, the native Chibi Finance token (CHIB) plummeted in value. After trading above $1.62 on Monday, the CHIB price sharply dropped to almost zero on Tuesday morning. Data from CoinGecko shows that the crypto token has lost 98.7% of its value in the past 24 hours and is currently trading at around $0.017.
Investors and users of Chibi Finance have been left in shock and anger, questioning the security and integrity of projects built on the Arbitrum Layer-2 network. Such incidents highlight the importance of conducting thorough due diligence and practicing caution when investing in DeFi projects.
This unfortunate event also serves as a reminder for regulators and industry participants to implement stricter security measures and regulations in the cryptocurrency space. The growing number of rug pulls and scams is detrimental to the overall reputation of the industry and hinders its potential for widespread adoption.
As the investigation into Chibi Finance unfolds, it remains to be seen if any actions will be taken to recover the stolen funds or bring the culprits to justice. In the meantime, users are advised to exercise caution and remain vigilant in navigating the DeFi landscape.
