Chibi Finance, a decentralized finance (DeFi) project, has pulled off a rug pull scam and made off with over $1 million worth of assets. The team behind Chibi Finance quickly transferred users’ funds to an Ethereum address and converted them to Ether. A rug pull scam involves developers building up a project’s reputation, generating funds, and then draining liquidity from the tokens, leaving investors with nothing. The Chibi Finance team deployed a malicious contract to seize funds from the protocol’s smart contract. The stolen funds were then converted to Wrapped Ethereum and transferred to Tornado Cash. Chibi Finance’s digital presence has disappeared, and its native token, CHIBI, has plummeted by 99.4%. This is the 12th incident of a rug pull on the Arbitrum network in 2023. Losses from rug pulls and exit scams in the crypto market have exceeded those from DeFi attacks in May. Investors should exercise caution and conduct thorough research before investing in cryptocurrencies to avoid falling victim to scams.
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