Key Points

  • Chibi Tokens have dropped by 98% in value after the team behind Chibi Finance withdrew liquidity.
  • The team appears to have made away with over $1M.

On 27 June 2023, Chibi Finance conducted an exit scam on the project. The team removed liquidity from the Arbitrum-based protocol, which was then bridged to Ethereum, where 555 ETH, approximately $1,041,141, was deposited into the crypto mixer Tornado Cash before being transferred to individual wallets across other networks.

More scams in the crypto space as Chibi Finance pulls the plug on its customers

Chibi Finance also deleted its Twitter account and website, confirming the exit scam. This is not the first such scam in the crypto space. So far, in 2023, CertiK has confirmed over $14M lost in scams on the Arbitrum network across 12 incidents.

This attack could have been possible as Chibi developers had the chance to deploy a malicious contract that allowed them to siphon funds from Chibi’s smart contracts, according to security firm Certik.

The team managed to get away with around 555 ETh that transferred from Arbitrum to Ethereum. It then used the unpopular crypto mixer, Tornado Cash, to launder the loot before sending it across different networks. 

According to Certik, EOA 0x80c1ca8f002744a3b22ac5ba6ffc4dc0deda58e3 removed the following assets from the project’s contracts:

256,012.95 USDC

94.67 WETH

4.25520843 WBTC

115,049 USDT

89,563.95 ARB

Certik also noted that:

“All contracts were created by the Deployer of Chibi Finance. The deployer set the malicious contract as the `_gov` address giving the contract the ability to call `panic`. This function allows the malicious contract to `emergencyWithdraw` funds to the exit scammers address.”

No action on the Chibi team or clarity for investors has been taken. Meanwhile, keep watching Fintech Express for updates on this and other fintech-related stories.