July 3rd, 2023
Chibi Finance is an Arbitrum-based yield-optimization protocol. In June 2023, the team behind the project performed a rug pull, stealing an estimated $1 million from users.
Chibi Finance claimed to be a protocol that would provide automatic rewards to users who staked tokens. However, these users lost a total of 555 ETH — worth about $1 million — during the rug pull.
The team behind Chibi Finance deployed a malicious contract that enabled them to drain the stolen value from the project’s liquidity pools. The assets were bridged over to Ethereum and sold for 555 ETH before the use of Tornado Cash to cover the attacker’s tracks.
Rug pulls are an ongoing threat in the crypto space. Any claims that a protocol provides guaranteed returns on investment should be taken with a grain of salt.
The Chibi Finance incident and other rug pulls underscore the importance of doing your own research. For more information on protecting yourself against these attacks, check out our blog on the warning signs of an exit scam.