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

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.