Crypto Firm Pulls the Rug from Under Investors with $10m Scam
Arbix Finance, a seemingly securely vetted cryptocurrency firm, appears to have scammed its customers and investors out of millions after its developers made off with the deposited funds. The company was a yield farming firm previously audited by decentralized finance (DeFi) actor CertiK. CertiK tweeted earlier this week confirming the scam, which is known as a rug pull or exit scam. In these types of scams, project developers gather money and support for new business ideas only to run off with the funds.
Those in charge of the depositor contract at Arbix had directed $10 million in investor funds to unverified pools, a tool used to deposit and withdraw funds. An unknown actor then drained the assets from the pools, and converted them to Ethereum. The fact that the company was previously certified highlights the difficulty of properly verifying startups before investing in the DeFi community. According to reports, rug pulls are becoming increasingly common among fraudsters.