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Crypto Arbix Flagged as Rugpull For Millions of Dollars

Arbix Finance, an audited and ostensibly reliable yield farming platform, has been identified as a “rugpull,” resulting in the deletion of its website, Twitter account, and Telegram channel, as well as the transfer of $10 million in cryptocurrency deposits.

Rugpulls, also referred to as “existing scams,” occur when fictitious platforms or cryptocurrencies are established with the intention of raising money for a purportedly legitimate “service,” only to vanish with the deposited funds.

When developers completely give up on projects after receiving a sizable investment in their fictitious cryptocurrency or decentralized finance venture, the situation is referred to as a “rug pull.” This kind of scam is very common in the cryptocurrency industry, and scam victims worldwide have reported losing over $7.7 billion in cryptocurrency.

The incident analysis conducted by the company found a number of reasons why the project was flagged. The security company reports that 4.5 million ARBX tokens were issued to a single address out of the 10 million ARBX tokens that were issued to 8 addresses via the mint () with onlyOwner function in the ARBX contract. The 4.5M newly minted tokens were then dumped, according to CertiK.

The business also disclosed that $10 million in user deposits went to unverified pools, where they eventually lost all of their assets to a hacker. The company discovered that the hacker transferred the funds to Ethereum through the decentralized exchange AnySwap USDT by using the platform’s Skytrace tool to assess the risk of fraud.

According to a Chainalysis report, the rise in cryptocurrency scam losses in 2021 was largely due to rug pulls. According to the report, rug pulls accounted for “37 percent of all cryptocurrency scam revenue in 2021.”

Arbix Finance

Victims around the world lost around $529 million from being swindled by their cyber sweetheart

npr.org report

If you want to keep yourself safe from falling victim to Online Scams, then you’re definitely at the right place. We can give you the best practices in identifying red flags as well as help you in recovering your stolen money from scammers!

Table of Contents

Commission Claims That Cryptocurrency Scammers Have Stolen More Than $1 Billion

Digital currency is a type of money that is kept in a digital wallet and can be converted into actual cash by the owner by transferring it to a bank account. Digital currency is different from cryptocurrencies like bitcoin. Since it runs outside of financial institutions and uses blockchain for verification, it is more difficult to recover from theft.

Even though cryptocurrency is a more recent trend, thieves are still stealing using traditional methods. Here are a few typical cryptocurrency scams to be aware of. Scams always follow when money is involved. The same applies to cryptocurrencies.

Wormhole, a cryptocurrency exchange platform, suffered a $320 million loss as a result of a cyberattack in February 2022. In addition to this attack, a report by the Federal Trade Commission claims that cryptocurrency scammers have stolen more than $1 billion since 2021.

Cryptocurrency Scams

In rug pull scams, fraudsters “pump up” a new project, non fungible token (NFT), or coin to attract investors. The con artists simply vanish with the money after obtaining it. These investments’ coding forbids people from selling bitcoin after buying it, leaving investors with a worthless investment.

The Squid coin scam, which took its name from the well-liked Netflix series Squid Game, is a common variation of this scam. To earn cryptocurrency, investors had to play: People would purchase tokens for online games and later earn more to trade for other cryptocurrencies. The Squid token’s value increased from one cent to roughly $90 per token.

Trading eventually ceased, and the funds vanished. As people tried to sell their tokens but were unsuccessful, the token value eventually fell to zero. Over $3 million was obtained from these investors by the con artists. Rug pull scams are also prevalent for NFTs, unique digital assets.

crypto coin

History of Crypto Arbix & Scam Case

Many cryptocurrency investors are familiar with the crypto auditing project CertiK. The CertiK team thoroughly examines the websites, white papers, and source code of cryptocurrency projects in order to find bugs, point out errors, and affix a certificate of authenticity. 

Developers can even apply to have CertiK audit their projects as part of the service’s ongoing monitoring of the most secure cryptocurrency projects to invest in. An unblemished audit demonstrates to investors that the company values security and is legitimate.

A CertiK audit frequently produces a list of errors and bugs along with recommendations for correcting them. Users can see the status of errors on the website and be informed when they are patched. However, sometimes much more dire news is received. This is the situation right now because CertiK is alerting investors to a project.

The warning about a cryptocurrency scam that CertiK is issuing today is directed at Arbix Finance. On the Binance (CCC: BNB-USD) Smart Chain, there is a protocol called Arbix that advertises itself as a DeFi platform where users can stake assets for passive income. It mainly uses the ARBX token for operation.

online scammer on duty

A CertiK audit frequently produces a list of errors and bugs along with recommendations for correcting them. Users can see the status of errors on the website and be informed when they are patched. However, sometimes much more dire news is received. This is the situation right now because CertiK is alerting investors to a project.

The warning about a cryptocurrency scam that CertiK is issuing today is directed at Arbix Finance. On the Binance (CCC:BNB-USD) Smart Chain, there is a protocol called Arbix that advertises itself as a DeFi platform where users can stake assets for passive income. It mainly uses the ARBX token for operation.

If you’ve been a victim of Crypto Scam you can contact us for support.

crypto blockchain

Crypto Arbix Analysis

  1. The $ARBX contract has the onlyOwner function in mint().
  2. 10 million $ARBX was issued to eight addresses.
  3. 4.5M ARBX were minted to the following address: 0x161262d172699cf0a5e09b6cdfa5fee7f32c183d.
  4. The 4.5M ARBX were then dumped — on January 4, 2022, CertiK Security Leaderboard (@certikorg)

After careful consideration, CertiK is advising investors to avoid Arbix and the ARBX token or to exit the position as soon as possible. The company considers Arbix to be a rug pull scam, according to a tweet. A privilege functionality that allowed developers to create millions of ARBX tokens was discovered in the code. One wallet had minted 4.5 million ARBX, and it immediately dumped the bag.

After the accusation, Arbix seems to have practically vanished. According to CoinGecko, the price of ARBX has almost reached zero. The project’s website and Twitter accounts have also vanished in the interim.

Arbix Finance, an audited and ostensibly reliable yield farming platform, has been identified as a “rugpull,” resulting in the deletion of its website, Twitter account, and Telegram channel, as well as the transfer of $10 million in cryptocurrency deposits. According to Bleeping Computer:

Rugpulls, also known as “exit scams,” occur when fictitious platforms or cryptocurrencies are established with the intention of raising money for a purportedly legitimate “service,” only to vanish with the money that was collected. Decentralized networks are inherently unreliable, so organizations like CertiK try to assess them through audits that look for indications of fraud, weaknesses, privacy issues, etc., in a token’s smart contracts. In Arbix’s case, CertiK performed an audit on November 19, 2021, whose results had initially been a justification for users to believe Arbix Finance.

As of right now, according to a tweet from CertiK, Arbix is now considered a rug-pull after it was discovered that the token’s smart contract was minting 10 million ARBIX to addresses under the owner’s control before selling them for Ethereum. Additionally, the Arbix administrators transferred $10 million in user deposits to “unverified pools,” where they were changed into Ethereum. The con artists then transferred the Ethereum to Tornado. Cash is a mixer that makes it harder to find money. Although the money’s whereabouts are being tracked, there is currently little chance that it will be found.

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Arbix's Depositor Contract Sent $10 million in Investor Funds To Unverified "Pools"

The developers of a cryptocurrency company that had been thoroughly vetted appear to have defrauded customers out of millions of dollars.

Before being audited by CertiK, a decentralized finance (DeFi) security player, Arbix Finance was a yield farming company. However, CertiK tweeted earlier this week that it had engaged in a well-known “rug pull” scam. These, also referred to as “exit scams,” involve project developers stealing money from investors.

According to the security company, those in charge of Arbix’s depositor contract sent $10 million in investor funds to unverified “pools,” which are a tool used to deposit and withdraw money from DeFi ecosystems. The funds from these pools were then stolen by an unidentified hacker, who converted them to Ethereum using the exchange AnySwap USDT.

The exploited contract was not covered by the audit that Arbix underwent, according to CertiK. The project added eight “mint()” functions to an ARBX ERC20 contract that had just been released, enabling the owner to mint any number of ARBX tokens and send them to any address.

The fact that Arbix Finance was previously certified brings attention to the challenges that investors face in the world of DeFi. Rug pulls, though, are a growing problem. According to one study, compared to just 1% the year before, such scams accounted for over a third (37%) of the revenue made from cryptocurrency fraud in 2021.

In 2021, this brought in more than $2.8 billion for fraudsters.

Stealing Peoples Money

How Much Did The Victims Lose?

After conducting an incident analysis, blockchain security company CertiK dubbed Arbix Finance’s alleged theft of user funds a “rug pull.” Arbix Finance is a yield-farming protocol that uses the Binance Smart Chain. 

The developments follow a recent report from the Library of Congress, the de facto national library of the United States, and the research library for the U.S. Congress, which lists dozens of countries that have now explicitly or implicitly forbid the use of cryptocurrencies.

In the most recent suspected scheme, 10 million ARBX tokens were “minted,” or validated, to eight addresses, including 4.5 million to a single address. This raised suspicions about the yield-farming project Arbix, a protocol that works by locking cryptocurrency in exchange for interest. According to blockchain security company CertiK, the tokens were subsequently “dumped.”

According to CertiK, $10 million in user deposits were made to unverified pools, where an actor later withdrew the money. A threat actor transferred money to the Ethereum blockchain using AnySwap USDT, according to CertiK’s analysis tool.

CertiK concluded that the activity was a drug pull, in which the administrators aggressively market a fake crypto-token, collect user funds, and then flee with the total amount.

forex market

Scammers Made about $14 Billion in Cryptocurrency

In 2021, scammers made about $14 billion in cryptocurrency, according to a recent report from Chainalysis, a blockchain analytics company. 

Theft and con games drove a 79 percent increase in losses associated with crypto crimes year over year. According to the report, scams accounted for $7.8 billion in crypto assets in 2021, of which $2.8 billion came from rug pulls. According to Chainalysis, theft, in which cryptocurrency projects, frequently using open-source software, were hacked, was not far behind. A total of $3.2 billion worth of tokens were stolen, a 516 percent increase year over year, and 72 percent of those tokens came from DeFi protocols.

According to the report, decentralized finance, which runs on peer-to-peer smart contracts across decentralized applications, or DApps, rather than on traditional intermediaries, was a significant factor in the losses.

crypto coin and dollar bills

Approximately $94 billion was locked in DApps at the time of publication, according to DeFi Pulse, which keeps track of related assets. The cybersecurity industry is concerned about the security level of DeFi transactions due to their rapid growth, as some projects rush to market as a result of the increase in investment.

A hacker is known as “Mr. White Hat” famously broke into the Poly Network platform in 2021 and stole more than $600 million in cryptocurrency. The threat actor promptly returned all of the money in the ensuing days. The cryptocurrency project reportedly offered the hacker a job as a security consultant and offered them a reward for finding security flaws. 

Security professionals argue that the return was not as admirable as it first appeared and that the hacker probably struggled to launder the money.

Key Takeaways!

Yield farming is a particularly alluring prospect for investors and a valuable lure for scammers because it promises to generate “interest” on cryptocurrencies in a manner similar to the annual percentage yields banks offer depositors of fiat currency.

Practice good digital security habits like using strong passwords only on secured connections or VPNs and selecting safe storage to defend digital wallets from scammers. Wallets come in two varieties: hardware and digital. Because they are hosted online, digital wallets are more likely to be compromised. Hardware wallets enable offline storage of data on a device, including the cryptocurrency wallet and keys.

Keeping cryptocurrency secure is essential because it is not covered by the Federal Deposit Insurance Corporation. Never divulge access codes or wallet keys to anyone.

do you need help?

A lot of those who contact us have questions and concerns about their personal and business data being compromised. We aim to arm you with the legal and technical know-how in the fight against scams. Also, we will be able to refer you to top scam recovery agencies.

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