Chibi Finance Exit Scam: $1 Million Cryptocurrency Heist Rocks Defi Platform on Arbitrum

According to several reports, Chibi Finance, the decentralized finance (defi) platform built on top of Arbitrum, allegedly executed an exit scam on its users. Blockchain intelligence firm Peckshield provided a detailed account, revealing that approximately $1 million worth of cryptocurrency assets were illicitly withdrawn and converted into Ethereum.

Chiba Finance Becomes 12th Defi Platform on Arbitrum to Exit Scam, Says Smart Contract Auditor Certik

On June 27, 2023, the blockchain analysis and intelligence firm Peckshield’s Twitter alert system notified the community about funds being drained from the DeFi application Chiba Finance. “Seems like Chiba Finance rugged,” Peckshield’s alert disclosed on Tuesday. “$1M worth of cryptocurrencies were drained. The stolen funds, which have been swapped for 555 ETH, were bridged from Arbitrum to Ethereum. They have already been transferred into Tornado Cash,” the notice added.

All traces of Chiba Finance, including the website, Twitter account, Discord server, Telegram channel, and Medium account, have been completely removed and eradicated from the internet. Chiba Finance promoted a “yield farming optimizer” on Arbitrum, offering users the opportunity to earn “auto-compounded yields at optimal intervals” by consolidating gas costs through their smart contracts. Users essentially entrusted their assets to Chiba’s vaults to accrue the project’s native token, CHIBI.

On Monday, before the entire team vanished without a trace, CHIBI was trading at $1.35 per unit. Today, the coin has plummeted to 0.0095, which is slightly less than one U.S. cent. An archived version of the project’s website reveals that it is relatively new, and its smart contract underwent an audit by the blockchain auditor Solid Proof in May 2023. On Tuesday, the smart contract auditing firm Certik disclosed that Chiba Finance marked the 12th exit scam recorded on Arbitrum this year.

“The scammer funded EOA 0x80c via a 10 ETH [Tornado Cash] withdrawal on Ethereum and created a malicious contract (0xB61),” Certik said. “The deployer of Chibi Finance called `setGov` which assigned the malicious contract to the `_gov` role. This allowed contract 0xB61 to call `panic` which permitted them to withdraw funds from the Chibi Finance contracts. Funds were then transferred to EOA 0x80c, swapped for WETH and bridged to the Ethereum network.”

What are your thoughts on the exit scams in the Arbitrum defi space? Share your thoughts and opinions about this subject in the comments section below.

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