ARB price shrugs off FUD around Arbitrum-based $1M Chiba Finance rug pull with a 10% rise

  • Arbitrum price is up 10% despite negative publicity following the Chiba Finance DeFi rug pull.
  • The incident happened on June 26, when the entire Chiba Finance team vanished without a trace.
  • The loot was swapped for 555 ETH, bridged from Arbitrum to Ethereum, and transferred into Tornado Cash mixer, hence untraceable.

ARB price has not succumbed to the negative news that befell the Arbitrum ecosystem earlier in the week. Like most altcoins, the Ethereum (ETH) Layer-2 (L2) scaling solution is trading with a bullish bias, recording double-digit gains since the Monday lows.

Also Read: Why do whales accumulate millions of Arbitrum?

ARB price on course north despite a dented ecosystem integrity

ARB price is up 10% from the daily low of $1.08 recorded on Monday, June 26. This was the same day when Chiba Finance, a decentralized finance (DeFi) platform built atop the Arbitrum network, reportedly "executed an exit scam on its users."

According to reports by security firm Peckshield, the incident saw up to $1 million worth of crypto assets illegally retrieved before the perpetrators disappeared without a trace.

Chiba Finance advertised a "yield farming optimizer" on the Arbitrum network, where users could earn "auto-compounded yields at optimal intervals." In turn, the users had to consolidate gas costs via their smart contracts. As such, the users innocently entrusted their holdings to the project's vaults, hoping to accrue CHIBI, the Chiba ecosystem's ticker.

Based on the Peckshield report, the bad actors swapped the loot for 555 Ether (ETH) tokens after bridging them from the Arbitrum to the Ethereum network. To avoid being tracked, the funds were moved to the infamous mixer tool, Tornado Cash, popular among exploiters.

According to Certik, a smart contract auditor that detailed how the rug pull happened, the unfortunate incident adds Chiba Finance to the list of DeFi platforms on the Arbitrum network to execute exit scams. This questions the integrity of Arbitrum's vetting process when onboarding DeFi projects into its ecosystem, considering the latest case is not the first or second incident but the twelfth on the Arbitrum ecosystem this year alone!

It is worth mentioning that archived (as the website is currently down) data from the Chiba website indicates that the project was still in its latent stages, with the first audit on the smart contract tracing back a month, May 23, by blockchain auditor Solid Proof.

Meanwhile, the bad actors at Chiba Finance have vanished, clearing their internet presence, as there is currently no record of their website, Twitter Discord, Telegram, or Medium accounts.

ARB price forecast

ARB price is at $1.20 at the time of writing, up 10% from the daily low of $1.08 on Monday. The Ethereum L2 token continues to consolidate along an uptrend line, which, if sustained, could deliver more gains for investors.

This outlook is supported by the Awesome Oscillators (AO) and Moving Average Convergence Divergence (MACD) indicators, whose histograms were green-soaked and in the positive zone. Similarly, the Relative Strength Index (RSI) was climbing, indicating rising momentum.

ARB/USDT 1-Day Chart

Conversely, in line with expert predictions, there is a likelihood for ARB price to pullback with hopes of collecting liquidity resting below the psychological $0.98 level. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content

Recommended Content

Editors’ Picks Price Prediction: FET must hold above $1.70 for strength Price Prediction: FET must hold above $1.70 for strength price has dropped nearly 45% since late March as broader markets started bleeding. FET bulls must defend $1.70 if they want to keep the upward thrust alive, signaling strength on the AI coin. A break and close below $1.59 would mean a lower low, invalidating the bullish reversal thesis.

More News

OKX executives depart from exchange while its XLayer Chain goes live

OKX executives depart from exchange while its XLayer Chain goes live

Two senior executives at crypto exchange OKX, Tim Byun and Wei Lan, have left the company after years of heading key roles, according to a CoinDesk source. However, the company is making expansion moves through the launch of its own Layer 2 (L2) chain.

More Cryptocurrencies News

Traders eyeing long positions could have their rally soon as funding rates flip negative

Traders eyeing long positions could have their rally soon as funding rates flip negative

Bitcoin (BTC) price remains on a load-shedding exercise, a sentiment that has spilled over to the broader market. Nevertheless, the bleed seen across the cryptocurrency market could end soon amid possible shifting market sentiment.

More Cryptocurrencies News

Prisma Finance hacker could be uncovered after investigations by on-chain analyst

Prisma Finance hacker could be uncovered after investigations by on-chain analyst

On March 28, DeFi protocol Prisma Finance suffered an attack on one of its smart contracts, resulting in a loss of 3257 ETH worth $11.1 million. Prisma Finance immediately halted its protocol after the hack, ordering users to revoke access to the smart contract.

More Cryptocurrencies News

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin (BTC) price has been hovering around the $70,000 psychological level for a few weeks, resulting in a rangebound movement. This development could lead to a massive liquidation on either side before a directional move is established. 

Read full analysis