{"investigation":{"slug":"arbiswap","entity_name":"ArbiSwap","trust_score":2,"severity_base":null,"score_modifier":0,"confidence":0.88,"status":"published","content_type":"investigation","summary":"ArbiSwap was a decentralized exchange (DEX) launched on the Arbitrum network in February 2023 that executed a rug pull on March 2, 2023, approximately six days after launch, stealing roughly 84 ETH (over $100,000) from users and moving the proceeds through Tornado Cash. The anonymous developer exploited a hidden 'recoverToken' function in a swapped smart contract to drain liquidity pools while the ARBI governance token collapsed more than 99% in value. The project attracted $4.4 million in total value locked by advertising unsustainable yields above 1,000% APY before abandoning the protocol and going silent.","sections":[{"content":"ArbiSwap launched on February 24, 2023, positioning itself as a native decentralized exchange on the Arbitrum Layer 2 network. The platform issued a governance token called ARBI and advertised returning 100% of all generated trading revenue to token holders, along with annual percentage yields exceeding 1,000% on ETH and Bitcoin pairs. According to reporting by CryptoSlate and CoinDesk, the protocol accumulated $1 million in total value locked within 30 minutes of its initial launch and reached a peak TVL of approximately $4.4 million on DeFiLlama prior to the rug pull event. The project claimed to be a utility layer built on Arbitrum and described itself as an arbitrage monitoring tool covering over 800 coins, though the primary user-facing product was a token-issuance DEX rather than an automated arbitrage service.","heading":"Overview and Launch","sources":[{"url":"https://www.coindesk.com/tech/2023/03/02/arbitrum-dex-arbiswap-rug-pulls-users-for-over-100k","name":"Arbitrum DEX ArbiSwap Rug Pulls Users for Over $100K — CoinDesk","type":"news_article","credibility":1},{"url":"https://cryptoslate.com/arbitrum-based-dex-arbiswap-rugs-users-days-after-launch-token-down-99/","name":"Arbitrum-based DEX ArbiSwap rugs users days after launch — CryptoSlate","type":"news_article","credibility":2},{"url":"https://coinfomania.com/investors-lose-112k-to-arbiswap-rugpull/","name":"Rugged! Investors Lose $112k to Arbitrum DEX ArbiSwap — CoinFomania","type":"news_article","credibility":2}],"severity":"high"},{"content":"On March 2, 2023, the anonymous developer executed a hard rug pull by first swapping the project's deployed smart contract to a new address (0x5e7aBD428e2BE79af3317DbdF2BffC31BF7075cF) that contained a hidden 'recoverToken' function with 'onlyOwner' access control, meaning only the contract deployer could invoke it. According to an emergency alert published by DeFi security firm RugDocIO, the developer used this function to redirect user funds held in the contract to their own wallet. In parallel, PeckShield's on-chain analysis found that the deployer minted 1 trillion ARBI tokens and swapped them for USDC through the ARBI/USDC liquidity pool, crashing the token's price and then converting the USDC proceeds into Ethereum via a series of arbitrage transactions. The deployer netted approximately 68.47 ETH from the primary exploit; the overlooked ARBI/WETH pool was subsequently drained by an independent arbitrage bot that captured roughly $112,000 in profit. The ARBI/USDC pool (designated 'pool2') held the stolen funds, while assets in the original contract address ending in 392B4 remained technically withdrawable if users acted quickly.","heading":"Rug Pull Mechanics","sources":[{"url":"https://beincrypto.com/is-arbiswap-rugging-own-users/","name":"Arbitrum DEX ArbiSwap Allegedly Rug-Pulling its Own Users — BeInCrypto","type":"news_article","credibility":2},{"url":"https://www.investing.com/news/cryptocurrency-news/rugdoc-alerts-the-public-over-an-ongoing-rug-pull-on-arbiswap-3020607","name":"RugDoc Alerts the Public Over an Ongoing Rug Pull on ArbiSwap — Investing.com / CoinEdition","type":"news_article","credibility":2},{"url":"https://getblock.net/en/news/arbitrum-based-arbiswap-token-collapses-by-999","name":"Arbitrum-based ArbiSwap token collapses by 99.9% — GetBlock","type":"news_article","credibility":2},{"url":"https://crypto.news/arbitrum-dex-arbiswap-rug-pulled-by-developer/","name":"Arbitrum DEX ArbiSwap rug-pulled by developer — crypto.news","type":"news_article","credibility":2}],"severity":"critical"},{"content":"The ARBI token contract is deployed at address 0x9dB8a10C7FE60d84397860b3aF2E686D4F90C2b7 on Arbitrum One and shows a maximum total supply exceeding one trillion units, consistent with PeckShield's finding that the deployer minted 1 trillion tokens immediately prior to the exploit. On-chain data cited by CryptoSlate and CoinFomania indicates the operator ultimately extracted approximately 84 ETH in total from the protocol — combining proceeds from the mint-dump on the ARBI/USDC pool and other liquidity positions. The stolen ETH was subsequently routed through Tornado Cash, a privacy-mixing protocol, to obscure the destination of funds, which is a standard obfuscation technique documented in numerous DeFi exit scams. The developer's operational wallet addresses have not been publicly attributed to a known individual, and the anonymous team made no public statement or offer of restitution following the event.","heading":"On-Chain Footprint and Tornado Cash Usage","sources":[{"url":"https://arbiscan.io/token/0x9dB8a10C7FE60d84397860b3aF2E686D4F90C2b7","name":"Arbiswap Token (ARBI) Token Tracker — Arbiscan","type":"on_chain","credibility":1},{"url":"https://cryptoslate.com/arbitrum-based-dex-arbiswap-rugs-users-days-after-launch-token-down-99/","name":"Arbitrum-based DEX ArbiSwap rugs users days after launch — CryptoSlate","type":"news_article","credibility":2},{"url":"https://coinfomania.com/investors-lose-112k-to-arbiswap-rugpull/","name":"Rugged! Investors Lose $112k to Arbitrum DEX ArbiSwap — CoinFomania","type":"news_article","credibility":2}],"severity":"critical"},{"content":"The ARBI token price collapsed from approximately $1.50–$2.66 at peak to a fraction of a cent (recorded as low as $0.0000000093) within 24 hours of the rug pull, representing a loss of more than 99.9% of value. The protocol's TVL dropped from $4.4 million to approximately $269,000 in the immediate aftermath as residual assets remained in the original contract. RugDocIO issued an emergency public alert on March 2, 2023, advising users to immediately withdraw funds and revoke all token spending approvals, and specifically warned against using the ArbiSwap website frontend because it was allegedly linking to external wallet-draining tokens. The platform's social media channels and website went silent following the exploit, with no acknowledgment from the development team. The incident affected 965 token holders recorded on Arbiscan, though the exact number of users who suffered liquidity losses was not independently verified in coverage examined for this report.","heading":"User Impact and Security Warnings","sources":[{"url":"https://u.today/rug-pull-alert-large-arbitrum-dex-arbiswap-hardrugging-its-users-heres-what-you-must-do","name":"Rug Pull Alert: Large Arbitrum DEX ArbiSwap Hardrugging Its Users — U.Today","type":"news_article","credibility":2},{"url":"https://www.investing.com/news/cryptocurrency-news/rugdoc-alerts-the-public-over-an-ongoing-rug-pull-on-arbiswap-3020607","name":"RugDoc Alerts the Public Over an Ongoing Rug Pull on ArbiSwap — Investing.com / CoinEdition","type":"news_article","credibility":2},{"url":"https://arbiscan.io/token/0x9dB8a10C7FE60d84397860b3aF2E686D4F90C2b7","name":"Arbiswap Token (ARBI) Token Tracker — Arbiscan","type":"on_chain","credibility":1},{"url":"https://cryptodaily.co.uk/2023/03/users-lose-over-100k-dollars-in-arbiswap-rug-pull","name":"Users Lose Over $100K In ArbiSwap Rug Pull — Crypto Daily","type":"news_article","credibility":2}],"severity":"critical"},{"content":"Several structural characteristics of ArbiSwap identified post-collapse are consistent with a pre-planned exit scam rather than an opportunistic exploit. First, the developer seeded most ARBI token pairs at launch and retained concentrated control over liquidity pools, creating the precondition for the mint-dump. Second, the 'recoverToken' backdoor function was embedded in a contract that was silently swapped approximately 13 hours before the rug was executed, indicating premeditation. Third, the project's yield promises — exceeding 1,000% APY — are characteristic of high-urgency liquidity attraction schemes designed to maximize TVL before an exit. Fourth, no security audit was submitted for the ARBI token contract despite its owner-controlled minting and burning functions. The Solidity compiler version used (v0.6.12) was already outdated at the time of deployment and contained flagged medium-severity bugs. The anonymous team structure and the subsequent Tornado Cash fund routing further indicate deliberate effort to avoid attribution. The project is not believed to have any ongoing operations as of the date of this report.","heading":"Structural Red Flags and Scam Design","sources":[{"url":"https://www.coindesk.com/tech/2023/03/02/arbitrum-dex-arbiswap-rug-pulls-users-for-over-100k","name":"Arbitrum DEX ArbiSwap Rug Pulls Users for Over $100K — CoinDesk","type":"news_article","credibility":1},{"url":"https://crypto.news/arbitrum-dex-arbiswap-rug-pulled-by-developer/","name":"Arbitrum DEX ArbiSwap rug-pulled by developer — crypto.news","type":"news_article","credibility":2},{"url":"https://www.bitdegree.org/crypto/news/arbiswap-exploit-collateral-damage","name":"The ArbiSwap Exploit And Its Collateral Damage — BitDegree","type":"news_article","credibility":2},{"url":"https://arbiscan.io/token/0x9dB8a10C7FE60d84397860b3aF2E686D4F90C2b7","name":"Arbiswap Token (ARBI) Token Tracker — Arbiscan","type":"on_chain","credibility":1}],"severity":"critical"},{"content":"The entity was flagged by blockchain investigator ZachXBT as part of his broader monitoring of Arbitrum ecosystem scams. ZachXBT operates a Telegram channel (@investigations) and posts on X (formerly Twitter) tracking rug pulls, exit scams, and fund flows, and ArbiSwap appeared in his monitoring pipeline. Independent searches of his archived Telegram posts and public investigations page did not return a dedicated long-form report on ArbiSwap specifically, suggesting the flag was issued as a community alert or brief mention rather than a full forensic investigation. The primary third-party security documentation of the incident was produced by RugDocIO, which issued the first public alert, and by PeckShield, which provided on-chain transaction analysis identifying the mint-dump mechanics and Tornado Cash routing. These firms represent established Tier 2 credibility sources in the DeFi security space. The absence of a named ZachXBT investigation report lowers confidence on the specific framing of his involvement, though the incident itself is well-documented across multiple independent news outlets.","heading":"ZachXBT Flag and Community Intelligence","sources":[{"url":"https://t.me/investigations","name":"Investigations by ZachXBT — Telegram Channel (@investigations)","type":"social_media","credibility":2},{"url":"https://en.wikipedia.org/wiki/ZachXBT","name":"ZachXBT — Wikipedia","type":"other","credibility":2},{"url":"https://beincrypto.com/is-arbiswap-rugging-own-users/","name":"Arbitrum DEX ArbiSwap Allegedly Rug-Pulling its Own Users — BeInCrypto","type":"news_article","credibility":2}],"severity":"high"}],"timeline":[{"date":"2023-02-24","event":"ArbiSwap launches on Arbitrum. The ARBI token is issued and liquidity pools open. The protocol reaches $1 million TVL within 30 minutes.","source":"CryptoSlate","source_url":"https://cryptoslate.com/arbitrum-based-dex-arbiswap-rugs-users-days-after-launch-token-down-99/"},{"date":"2023-02-28","event":"ArbiSwap TVL peaks near $4.4 million on DeFiLlama. The protocol advertises 1,000%+ APY on ETH and BTC pairs to attract liquidity.","source":"CoinDesk","source_url":"https://www.coindesk.com/tech/2023/03/02/arbitrum-dex-arbiswap-rug-pulls-users-for-over-100k"},{"date":"2023-03","event":"Approximately 13 hours before the rug pull, the developer silently swaps the project's router contract to a new address (0x5e7aBD428e2BE79af3317DbdF2BffC31BF7075cF) containing a hidden 'recoverToken' backdoor function.","source":"BeInCrypto / RugDocIO","source_url":"https://beincrypto.com/is-arbiswap-rugging-own-users/","date_original":"2023-03-01"},{"date":"2023-03-02","event":"The developer executes the rug pull: mints 1 trillion ARBI tokens, swaps them through the ARBI/USDC liquidity pool for USDC, then converts proceeds into approximately 68.47 ETH. The ARBI/WETH pool is accidentally left open; an arbitrage bot extracts roughly $112,000 from it.","source":"CoinFomania / PeckShield","source_url":"https://coinfomania.com/investors-lose-112k-to-arbiswap-rugpull/"},{"date":"2023-03-02","event":"RugDocIO issues an emergency public alert advising users to withdraw funds immediately and revoke all ArbiSwap token approvals. Total stolen estimated at ~84 ETH.","source":"Investing.com / CoinEdition","source_url":"https://www.investing.com/news/cryptocurrency-news/rugdoc-alerts-the-public-over-an-ongoing-rug-pull-on-arbiswap-3020607"},{"date":"2023-03-02","event":"ARBI token price collapses from approximately $1.50 to under $0.00000001, a decline of more than 99.9%. TVL drops from $4.4 million to approximately $269,000.","source":"U.Today / CoinDesk","source_url":"https://u.today/rug-pull-alert-large-arbitrum-dex-arbiswap-hardrugging-its-users-heres-what-you-must-do"},{"date":"2023-03-02","event":"CoinDesk, crypto.news, BeInCrypto, and U.Today publish reports on the rug pull. ArbiSwap's website and social media channels go silent with no developer statement.","source":"CoinDesk","source_url":"https://www.coindesk.com/tech/2023/03/02/arbitrum-dex-arbiswap-rug-pulls-users-for-over-100k"},{"date":"2023-03-02","event":"On-chain data shows the ArbiSwap operator routes approximately 84 ETH in stolen funds through Tornado Cash to obscure the destination.","source":"CryptoSlate","source_url":"https://cryptoslate.com/arbitrum-based-dex-arbiswap-rugs-users-days-after-launch-token-down-99/"}],"sources_used":[{"url":"https://www.coindesk.com/tech/2023/03/02/arbitrum-dex-arbiswap-rug-pulls-users-for-over-100k","name":"Arbitrum DEX ArbiSwap Rug Pulls Users for Over $100K — CoinDesk","type":"news_article","archive_url":"http://web.archive.org/web/20260724164302/https://www.coindesk.com/tech/2023/03/02/arbitrum-dex-arbiswap-rug-pulls-users-for-over-100k","credibility":1,"archive_timestamp":"2026-07-24T16:43:02+00:00"},{"url":"https://cryptoslate.com/arbitrum-based-dex-arbiswap-rugs-users-days-after-launch-token-down-99/","name":"Arbitrum-based DEX ArbiSwap rugs users days after launch — CryptoSlate","type":"news_article","archive_url":"https://web.archive.org/web/20260725123403/https://cryptoslate.com/arbitrum-based-dex-arbiswap-rugs-users-days-after-launch-token-down-99/","credibility":2,"archive_timestamp":"2026-07-25T12:34:03+00:00"},{"url":"https://crypto.news/arbitrum-dex-arbiswap-rug-pulled-by-developer/","name":"Arbitrum DEX ArbiSwap rug-pulled by developer — crypto.news","type":"news_article","archive_url":"http://web.archive.org/web/20251015204254/https://crypto.news/arbitrum-dex-arbiswap-rug-pulled-by-developer/","credibility":2,"archive_timestamp":"2025-10-15T20:42:54+00:00"},{"url":"https://beincrypto.com/is-arbiswap-rugging-own-users/","name":"Arbitrum DEX ArbiSwap Allegedly Rug-Pulling its Own Users — BeInCrypto","type":"news_article","archive_url":"http://web.archive.org/web/20251009235314/https://beincrypto.com/is-arbiswap-rugging-own-users/","credibility":2,"archive_timestamp":"2025-10-09T23:53:14+00:00"},{"url":"https://www.investing.com/news/cryptocurrency-news/rugdoc-alerts-the-public-over-an-ongoing-rug-pull-on-arbiswap-3020607","name":"RugDoc Alerts the Public Over an Ongoing Rug Pull on ArbiSwap — Investing.com / CoinEdition","type":"news_article","archive_url":null,"credibility":2,"archive_error":"error:no-request","archive_status":"unarchivable","archive_timestamp":null},{"url":"https://u.today/rug-pull-alert-large-arbitrum-dex-arbiswap-hardrugging-its-users-heres-what-you-must-do","name":"Rug Pull Alert: Large Arbitrum DEX ArbiSwap Hardrugging Its Users — U.Today","type":"news_article","archive_url":"http://web.archive.org/web/20250815160158/https://u.today/rug-pull-alert-large-arbitrum-dex-arbiswap-hardrugging-its-users-heres-what-you-must-do","credibility":2,"archive_timestamp":"2025-08-15T16:01:58+00:00"},{"url":"https://coinfomania.com/investors-lose-112k-to-arbiswap-rugpull/","name":"Rugged! Investors Lose $112k to Arbitrum DEX ArbiSwap — CoinFomania","type":"news_article","archive_url":"http://web.archive.org/web/20251210212210/https://coinfomania.com/investors-lose-112k-to-arbiswap-rugpull/","credibility":2,"archive_timestamp":"2025-12-10T21:22:10+00:00"},{"url":"https://getblock.net/en/news/arbitrum-based-arbiswap-token-collapses-by-999","name":"Arbitrum-based ArbiSwap token collapses by 99.9% — GetBlock","type":"news_article","archive_url":null,"credibility":2,"archive_error":"error:no-request","archive_status":"unarchivable","archive_timestamp":null},{"url":"https://www.bitdegree.org/crypto/news/arbiswap-exploit-collateral-damage","name":"The ArbiSwap Exploit And Its Collateral Damage — BitDegree","type":"news_article","archive_url":"https://web.archive.org/web/20260726065624/https://www.bitdegree.org/crypto/news/arbiswap-exploit-collateral-damage","credibility":2,"archive_timestamp":"2026-07-26T06:56:24+00:00"},{"url":"https://cryptodaily.co.uk/2023/03/users-lose-over-100k-dollars-in-arbiswap-rug-pull","name":"Users Lose Over $100K In ArbiSwap Rug Pull — Crypto Daily","type":"news_article","archive_url":"https://web.archive.org/web/20260725123325/https://cryptodaily.co.uk/2023/03/users-lose-over-100k-dollars-in-arbiswap-rug-pull","credibility":2,"archive_timestamp":"2026-07-25T12:33:25+00:00"},{"url":"https://flash.decrypt.co/en?id=125474","name":"ArbiSwap Rug Pull — Decrypt Flash","type":"news_article","archive_url":"http://web.archive.org/web/20260724164253/https://flash.decrypt.co/en?id=125474","credibility":2,"archive_timestamp":"2026-07-24T16:42:53+00:00"},{"url":"https://arbiscan.io/token/0x9dB8a10C7FE60d84397860b3aF2E686D4F90C2b7","name":"Arbiswap Token (ARBI) Token Tracker — Arbiscan","type":"on_chain","archive_url":"https://web.archive.org/web/20260724171710/https://arbiscan.io/token/0x9dB8a10C7FE60d84397860b3aF2E686D4F90C2b7#transactions","credibility":1,"archive_timestamp":"2026-07-24T17:17:10+00:00"},{"url":"https://defillama.com/protocol/arbiswap","name":"ArbiSwap TVL Stats — DeFiLlama","type":"research","archive_url":"http://web.archive.org/web/20250910090859/https://defillama.com/protocol/arbiswap","credibility":2,"archive_timestamp":"2025-09-10T09:08:59+00:00"},{"url":"https://t.me/investigations","name":"Investigations by ZachXBT — Telegram Channel (@investigations)","type":"social_media","archive_url":null,"credibility":2,"archive_timestamp":null}],"source_tags":["defillama"],"addresses":[],"reviewed":false,"reviewed_by":null,"model_used":"claude-sonnet-4-6","created_at":"2026-05-04T02:54:43.898022+00:00","updated_at":"2026-08-29T01:34:20.393+00:00"}}