Crypto Firm Pulls the Rug from Under Investors with $10m Scam

A securely vetted cryptocurrency company appears to have scammed millions of customers after its developers got hold of the deposited funds.

Arbix Finance was a performance production company previously audited by CertiK, a decentralized finance security (DeFi) actor.

However, earlier this week, CertiK tweeted news that he had performed a classic “throw the rug” scam. Also known as “exit scams,” they involve project developers running away with investor funds.

The security firm explained that the custodians of the depositor agreement at Arbix directed $ 10 million of investor funds to unverified “pools,” a tool used to deposit and withdraw funds in DeFi ecosystems.

Then an unknown hacker drained the assets of these groups and converted them to Ethereum via the AnySwap USDT exchange.

“The exploited contract was not in the scope of the audit that was conducted for Arbix,” explained CertiK. “The project inserted eight` mint () `functions into a recently implemented ARBX ERC20 contract that allowed the owner to mint any number of ARBX tokens in any direction.”

The fact that Arbix Finance has been previously certified highlights the difficulty investors face in the DeFi world.

However, carpet pulls are becoming more and more common. According to a report, more than a third (37%) of the revenue generated by cryptocurrency fraud in 2021 came from these types of scams, compared to just 1% the previous year.

This generated more than $ 2.8 billion for scammers in 2021.

“Carpet pulls are prevalent in DeFi because with the right technical knowledge, it’s cheap and easy to create new tokens on the Ethereum or other blockchain and get them listed on decentralized exchanges (DEX) without a code audit,” he explained. Chainalysis.

Yield farming is a particularly attractive prospect for investors and a valuable draw for scammers, because it offers the promise of generating “interest” in cryptocurrency in a manner similar to the annual percentage returns that banks offer currency depositors. fiduciary.

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