CertiK, a blockchain security firm, has posed a warning towards users to avoid engaging with Arbix Finance as they have determined the project as a rug pull.
There were numerous causes as to why the project was flagged, as per the firm’s incident analysis. “The ARBX contract has mint() with onlyOwner function, 10 million ARBX tokens were minted to 8 addresses,” the security firm said, and 4.5 million ARBX was traced to a single address.
After this, CertiK attested that “The 4.5M minted tokens were then dumped.”
The security firm also disclosed that the $10 million in funds that the users deposited was directed to pools that are not verified, and eventually led to a hacking and theft that voided all the assets from the pools.
The firm used its Skytrace tool to analyze the risk of fraud and confirmed that hackers had transferred funds via decentralized exchange AnySwap USDT.
The term “rug pull” has been popularized by cryptocurrency investors to define events where developers abruptly discard their projects after gaining a huge amount of investments in their dummy crypto or decentralized finance project.
Cryptocurrency scams are becoming more and more prevalent, leading to a total of $7.7 billion lost worldwide.
In November of last year, rug pulls were reported as one of many factors that play a part in a rise in money lost through crypto scams. “37% of all cryptocurrency scam revenue in 2021” were rug pulls, noted in a report.
Investors lost around $57 million worth of Ether in a rug pull by AnubisDAO, the forked copycat version from OlympusDAO. They said it was an opportunity to invest when others were selling out because pup coins had been making some extravagant gains recently and they thought this would continue.
