Chibi Finance, a DeFi project on Arbitrum’s Layer 2 network, has been accused of conducting a “rug pull” and making off with approximately $1 million in user deposits. Security analysts at PeckShield discovered that 555 ether (ETH) was drained from the platform’s liquidity pools. The Chibi Finance team withdrew users’ staked tokens, converted them to ether, and transferred the funds from Arbitrum to Ethereum using Tornado Cash, an Ethereum mixing service. Overnight, the team disappeared, and their social media accounts and website became inaccessible. The price of chibi tokens, issued by the project, dropped significantly from $1 to $0.017. This incident is the latest in a string of exit scams on Arbitrum and the broader Ethereum Layer 2 ecosystem, including Swaprum and Merlin.
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