2023’s ‘Largest Exit Scam’ on Arbitrum Unfolds, $2M Stolen

Lavina Daryanani
Source: The Economic Times

Arbitrum has gradually started making noise again within the crypto ecosystem. The on-chain metrics of the Ethereum scaling solution have been refined by leaps and bounds of late. Right from the number of daily transactions to the volumes settled on the chain, Arbitrum’s numbers have been hovering around their peak lately.

Leaving aside the positive strides made on the aforementioned fronts, it is worth noting that an algorithmic stablecoin project based on Arbitrum was hacked on Tuesday. The official Twitter handle of the project alleged that a Nigerian national had carried out the scam and asserted that he “claimed everything” from the Genesis Protocol.

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Crypto security firm CertiK alerted the community by tweeting about the ~$2 million scam. It was labeled the same as “the largest exit scam on Arbitrum” in 2023. As per the firm’s findings, around $1.86 million was transferred to Tornado Cash. Notably, Hope is a newly launched project. It was put to sea just a day back, i.e. on Feb. 20, 2023.

Post-scam, Hope Finance provided detailed instructions for users, directing them on how to withdraw their staked liquidity from the protocol via an “emergency withdraw” function.

Also Read – Crypto: Hacktober ends with over $3B in stolen assets in 2022

Situation to improve going forward?

Last year, the space was plagued by a number of scams where exploiters drained out huge amounts of funds. CertiK had already warned the community that scams, exploits, and hacks are unlikely to decrease in the cryptocurrency industry in 2023. Furthermore, it asserted that it does “not anticipate a respite in exploits, flash loans, or exit scams.”

Additionally, it went on to point out that there would likely be further exploitation aimed at crypto bridges this year. The firm also said that poor management of private keys could be the primary reason for wallet hacks in 2023. However, it also noted that this year, there’d probably be fewer brute-force assaults on crypto wallets.

Also Read: Crypto Scams, Hacks Unlikely to Slow Down in 2023: CertiK