TL;DR Breakdown
- Arbix Finance (ARBX) is a rug pull scam.
- Security firm CertiK analysed the projects mint activities to spot several red flags.
- Developers are moving over 14 million ARBX tokens to unverified wallets.
DeFi security firm Certik has identified Arbix Finance as a potential rug pull. The security firm has warned users to stay away from the project. Arbix Finance (ARBX) is a yield farming protocol based on the Binance Smart Chain (BSC). The project promises optimal yield on the blockchain at low risk.
However, CertiK has identified multiple red flags in the project, which potentially suggests that it’s a rug pull bound to happen. There are a number of privileged functionalities on the protocol. There’s an only owner function in the ARBX contract mint. Recent minting activities show that 4.5 million ARBX tokens were minted to a single address. It was followed by a mint of 10 million ARBX tokens to 8 addresses. CertiK confirmed that the initially minted 4.5 million tokens were dumped, suggesting that the owner is pulling out funds from the projects.
CertiK further analysed the wallet movements away from the platform. According to their analysis, the 4.5 million ARBX tokens were moved to the Ethereum blockchain. The tokens were then swapped for USDT on the AnySwap exchange platform.
Rug pulls are becoming frequent in the crypto space
The term ‘rug pull’ is used to define events where the developers and owners of a project run away with the investor’s funds, thus abandoning the project. In 2021, the overall crypto industry lost $7.7 billion due to scams and hacks. Almost half of these scams were rug pulls.
2021 was a revolutionary year for cryptocurrency, as trading volume and adoption skyrocketed to new heights. This allowed a large number of new investors to enter the industry. Investors are often pouring their funds into new projects without proper research due to FOMO. Scammers are exploiting the lack of knowledge from these new investors to carry out rug pulls more frequently.
Just months ago, we saw the Squid Game coin rug pull, where scammers used the hype of the popular Netflix show to run away with $2.5 million. There was also the rug pull of AnubisDAO, where scammers took off with almost $60 million. Crypto experts and security firms like CertiK are continuously engaging investors to research well before investing their funds into new and unverified projects like Arbix Finance.
We prepared a brief list of cautions that every investor should consider when investing in new projects. The list can be viewed here.
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