In May 2023, XIRTAM, a project on the Arbitrum blockchain, performed a rug pull. The project founder stole 1909 ETH (approximately $3.5 million) from the project.
Inside the Rug Pull
XIRTAM was an educational project that didn’t require users to perform Know Your Customer (KYC). Instead, users could build up their reputation by using the decentralized XIRTAM ecosystem.
The project was originally funded by CultDAO but had recently raised about 2000 ETH in user deposits. Shortly after this fundraising round, the project founders performed the rug pull, draining the deposited value from the contract.
The XIRTAM rug pull was unusual in that the thieves didn’t use a crypto-mixing service to cover their tracks. Instead, the stolen funds were deposited into Binance, which froze them after the incident was reported to them.
Lessons Learned
The XIRTAM rug pull demonstrates the ongoing threat of scam DeFi projects. This is not the first high-value rug pull and is unlikely to be the last either. To learn more about rug pulls and how to protect yourself, check out our blog on rug pulls in crypto.