A decentralized finance (DeFi) project called Chibi Finance on the Arbitrum network has reportedly stolen over $1 million in users’ funds. The project’s team has deleted their social media accounts and official website, leading the community to suspect a rug pull, which is when the core team of a project steals users’ funds and disappears. The blockchain security firm PeckShield has confirmed the theft, stating that the developers conducted a rug pull by swapping the funds to 555 Ethereum (ETH) and transferring them from Arbitrum to the Ethereum chain. They then used Tornado Cash to further funnel away the funds. The team’s disappearance has made it difficult for the community to reach out and question them. As a result, the native token of Chibi Finance, CHIBI, has plummeted by over 99%. Additionally, a crypto influencer named “Defi_Mochi” has faced community backlash for writing a sponsored thread promoting Chibi Finance. The community claims the influencer was paid $2,000 in ETH for the promotion. However, the influencer has since deleted the thread in light of the rug pull reports. Rug pulls are becoming increasingly common in the DeFi space, with users losing over $45 million to such incidents last month alone. One notable example is the Morgan DF Fintoch project, which stole over $32 million from investors. In this case, the project even used an actor’s photo as the CEO on their official website, signaling a red flag that investors could have potentially spotted with proper due diligence.
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