Shortly after the protocol went online earlier on Tuesday, developers of Chibi Finance, built on Arbitrum, appeared to have stolen over $1 million worth of various tokens, with funds quickly transferred to other networks.This was made possible because Chibi developers used a bad contract that gave them access to customer funds in the smart contracts used by Chibi, according to security firm CertiK.Data indicates that once the rug was pulled, CHIBI token prices dropped by 98%. Users could deposit tokens and instantly earn incentives with Chibi Finance, which marketed itself as a yield-optimizing business.
A cryptocurrency fraud known as a “rug pull” occurs when the perpetrator, or perpetrators, build credibility on social media, hype up a project, and amass a sizeable number of money, only to drain liquidity once the project’s tokens are first made available to the general public.
According to a tweet from security company PeckShield, the stolen tokens were transferred from Arbitrum to Ethereum on Tuesday during the Asian afternoon for the price of 555 ether (ETH).The money was subsequently transferred to Tornado Cash, a service that cryptocurrency thieves use to conceal their transactional activities.
Twitter account and website were disabled and destroyed.To the chagrin of the community, numerous Crypto Twitter influencers who had advertised the project to their followers had since removed their postings.