According to on-chain analytical platform, Peckshield, investors are likely to have lost $1 million worth of virtual assets on Arbitrum-based Chibi Finance. Today, the on-chain analytical platform detected the draining of 555 Ether which is presently worth $1 million according to market valuation from the DeFi project’s liquidity pools.
According to reports, the team behind the project allegedly removed assets staked on its platform by users. More so, the team then converted the assets to Ether. Peckshield through a graphical illustration on its Twitter page revealed how the team moved the funds from the Arbitrum blockchain to Ethereum. Thereafter, according to the illustration, the Chibi Finance team then sent the funds to Tornado Cash.
With Tornado Cash, the team intended to conceal the transaction pathway of the stolen funds to dodge investigative tips. It is worth mentioning that Tornado Cash is a privacy tool that aids users to obfuscate transaction trails. The tool has attracted huge scrutiny from regulators in the United States. In August 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) blacklisted Tornado Cash as a result of its increasing usage by hackers.
Despite the ban, the virtual assets currency mixer is still in use with its most recent application surfacing in the alleged rug pull on Chibi Finance. Since it’s become public, Tornado Cash has facilitated the laundering of over $8 billion worth of crypto assets. However, Arbitrum and other Ethereum layer-2 networks have been the subject of various rug pulls of late. In May 2023, investors of Swaprum a Defi project on Arbitrum lost $3 million to a rug pull by the project’s team.
Evidence backing claims about the rug pull carried out by the Chibi Finance team
Meanwhile, there are various pointers that linked the draining of Chibi Finance’s liquidity pools to the team behind the project. As of press time, the team has concealed its visibility on all social media platforms by deleting its account. Presently, the project’s Twitter and Telegram accounts are no longer accessible.
If fears about a rug pull on Chibi Finance are confirmed to be true, questions will surface again regarding the reliability of decentralized projects in the blockchain and crypto space. Likewise, investors are already feeling the negative effects of the calamity. At the moment, the value of the token issued by Chibi Finance has plummeted heavily. According to CoinGecko, the token dropped from $1 to $0.017