The ArbiSwap Exploit And Its Collateral Damage

GM Readers!📪 It's BitDegree Insider, and let's jump into that web3 jacuzzi.

⭐️Today's selection:

• 🚨The ArbiSwap Exploit
• 🗻Mt. Gox Situation
• 🧩️Thursday Quiz
• 👌Selected Meme of The Day
• 📰Bite-Sized News

WHAT IS GOING ON WITH ARBISWAP?

In the world of cryptocurrency, scams and fraudulent activities are not new.

Unfortunately, the latest victim is ArbiSwap, a DeFi exchange, has been in the news for all the wrong reasons.

In the past 24 hours, the value of the platform's native ARBI tokens plummeted from $1.5 to a minuscule fraction of a cent.

The reason? Well, it turns out, the developers minted 1 billion fake tokens, exchanging them for USD Coin (USDC), and then nearly 69 ETH.

This exploit was made possible because unscrupulous developers controlled the project's liquidity pools.

The situation drew the attention of the Rugdoc community analysts, who flagged the abnormal activity on the ArbiSwap platform.

The users of the platform also complained about a sharp drop in liquidity, which led to a "drawdown" of the native token rate.

According to Rugdoc.io, the exploit was caused by spoofing a smart contract.

The scammers have already stolen about 85 ETH, which went to ARBI/USDC LP, and arbitrage bots earned $112,000 for some traders.

At this point, not all the liquidity providers were affected, and users who deposited capital through the original contract are also out of danger.

However, they should withdraw their funds and revoke the rights as well.

At this point, suspicions of rug pulling undermine the reputation of the entire Arbitrum chain, which may lead to additional losses.

ArbiSwap's use of the name "ARBI" for their token may create confusion for investors and damage the reputation of the Arbitrum chain.

While ArbiSwap and their token are not official products of Arbitrum, the similarity in the name may cause potential investors to believe they are associated with Arbitrum.

When Arbitrum launches, it's likely that they will not use the name ARBI for their token, or they may choose to do so to indicate which one is the main token.

However, it's important for investors to be aware that ArbiSwap and ARBI token are not affiliated with Arbitrum and to exercise caution when investing in cryptocurrency.

Unfortunately, this kind of thing is not uncommon in the DeFi space.

In fact, another crypto-analyst with the nickname "Forgiving" also claimed a rugpull and shared an address for withdrawing funds.

Despite the severity of the situation, ArbiSwap has not yet commented on the situation.

In conclusion, it is essential to exercise caution and diligence while investing in cryptocurrency.

As more and more scams continue to emerge in the DeFi space, it is crucial to research and thoroughly understand the platforms before investing.

It is always better to be safe than sorry.

TL;DR: ArbiSwap, a DeFi exchange, saw its native token ARBI go from $1.5 to a fraction of a cent. Apparently, hackers spoofed the platform's smart contract and tampered with its liquidity pools.

MT. GOX UPDATES

Let's start with a quick intro for those who are new to the story.

Mt.Gox was once the world's largest Bitcoin exchange, but it went bankrupt in 2014 after losing 850,000 BTC in a hacking attack.

The exchange's creditors have been fighting for compensation ever since, and the process has been long and complicated.

Now, onto the latest news.

Rumors had been circulating that Mt.Gox would begin paying compensation to its creditors in August 2022, but they were quickly debunked by the creditors themselves.

However, the company recently announced a new date - September of 2023. And here's the kicker - part of the payments will be received in mid-March!

The first tranche of payments will include both early one-off payments and interim payments, but the exact amount and timing are still unknown.

The transfers are expected to be received after March 10th, so mark your calendars.

The Mt.Gox saga has been dragging on for over a decade now, and it's showing no signs of coming to an end.

This winter, customers were asked to fill out a form that allowed them to choose a payout format. Interestingly, the two largest lenders gave preference to BTC.

Last August, rumors about Mt.Gox's payouts had a serious impact on the crypto market.

The fear was that a flood of BTC could undermine the exchange rate.

But this time around, the community reaction has been rather sluggish.

Perhaps because Mt.Gox has only managed to recover about 20% of the lost amount, which translates to 142 thousand BTC and the same amount of BCH.

That's 28% of the average weekly supply of the asset! A one-time unlocking of such a number of "coins" could really affect the rate.

However, since the payments will stretch out over six months, the impact will be lessened.

Besides, some Mt.Gox creditors are still investing in cryptocurrencies and are unlikely to immediately transfer the compensation received into fiat.

Looks like this drama is far from over.

TL;DR: Mt. Gox, the infamous bankrupt crypto exchange, has confirmed that they're about to proceed with payments to their creditors. It's set to take place in September of this year, and part of the payments will begin being returned by mid-March!

THURSDAY QUIZ

You what day it is. Rev up those thinking machines of yours!

Here's the deal:

SELECTED MEME OF THE DAY

BITE-SIZED NEWS

• Robinhood Crypto Wallet Launches on Apple's App Store. There's some poetry in the usage of such names in one sentence.
• Binance Uses Artificial Intelligence (AI) To Mint NFTs At Blistering Speeds. In less than three hours, the Binance AI-powered NFT generator, Bicasso, minted 10,000 NFTs.
• Reserve Bank of Australia is Planning to Roll Out CBDC "Live Pilot". Unfortunately, global adoption is happening with things no one wants.