Furucombo Used Arbitrum Grants to Incentivize Stealing User Funds

This post is in regards to the following grant and really is as bad as the title sounds


In regards to the Furucombo-$ARB Bi-weekly #5 reward epoch

  • Furucombo in their rewards program with Arbitrum, was designed to incentivize user transactions, reimbursing users the fees they charged as well as earning user some rewards.
  • Furucombo charged user $52,171 in the form of $ETH in fees.
  • Furucombo did not distrubte Arbitrum rewards - On April 10, 2024 Furucombo proposed it will not even reimburse the fees taken but instead they will keep the majority of fees to themselves as well as the rewards. Only a very small portion of the fees in the form of 8500 $ARB (~$9,500) were to be distributed. (8500 ARB distributed as of April 17th)

The entire situation can be sumed up as an incentive structure that you could say trapped users into using the protocol in a way where Furucombo could later say was misuse. Allowing Furucombo to steal $42,671 from users and claiming innocence all while

Hsuan-Ting is suggesting Arbiturm is supporting their actions of stealing users funds.

Furucombo never stopped the campaign, never tried to inform users of misuse. After the campaign ended Furucombo never gave any user an opportuntity to discuss anything related to the campaign missunderstanding. It is almost as if Furucombos actions were intentional.

Time Line of Events

  • Furucombo submitted a claim to the STIP campaign
  • Granted 59,500ARB through the backfunding of the original STIP campaign that passed quorum but wasn’t allocated via the original proposal
  • Created campaign as detailed in th original proposal
  • Feb 23rd, altered the details of the campaign to include 'ANY trading action on the Lending Dashboard (as per this post: https://twitter.com/FurucomboDB/status/1761019495869460775)
  • March 28th Round 5 campaign ends
  • April 10th, announced the new ‘reward schedule’ from the anticipated 57,028ARB to 8,500ARB
  • Aprill 17th 8500 ARB distributed

Furucombo claims


My Response

I do not deny the claim that there was some users doing multiple swaps, this is likely. What I challenge is Furucombo deciding that they hold no fault in incentivizing ‘wash trading’ and then they are okay with taking those users funds without ever making any effort to seek an actual reasonable outcome. There is no evidence of theft from users as Furucombo control all the rewards as well as the fees they took. Hsuang-Ting has even threatend to take all the funds it has taken from users and returning nothing.

As stated below, the wallets are obvious and the high swapping didn’t occur until the last several days allowing any user to participate in rewards up until the last day. Does that really sound like ‘malicious actors’ trying to get away with something ‘wrong’? Maybe not everyone in crypto knows about this ‘wash trading’ that was incentiviezed isn’t allowed.


Meanwhile, after holding $52,171 of fees taken from users for several weeks Hsuang-Ting threatens taking all the fees. It is possible he will still do this and the users are just individuals at his mercy who try to make their voice heard. I just hope that if he goes this route Arbitrum at least get these fees back from them, I see in no way why he should be allowed try and steal from users and therefor indirectly be stealing from Arbitrum.

The community tried to speak with Hsuang-Ting, CEO of Furucombo publically and privately but unfortunatly most of the responses from Hsuan-Ting was threats (above), name calling, laughing/mocking react emoji, and/or just ignoring. There was never at anytime that I am aware of that he was engaged in constructive conversation about a solution.

Hsuan-Ting Laughs at users frustration with him ignoring his DM’s

I guess Hsuan-Ting is suggesting he deserves the fees he has taken to pay for his time???

There are many more text from users in discord, Blazar is part of the Furucombo core team. Users are seeking collaboration, understanding, feedback and it appears Blazar is giving filtered canned responses.



Here are some more responses from Hsuan-Ting in the tg. suggesting he is working with Arbitrum saying they are not to reward wash traders. I am curious, did Hsuan-Ting disclose to Arbitrum that he was infact incentivizing what he is calling ‘wash traders’ and then taking those fees for himself.

Does arbitrum know Furucombo has taken $52,171 from users by dangling $ARB rewards?


Event Details

Furucombo had several rounds of funding from Jan 8 - March 28.

Looking into the distribution of rewards during these weeks you’ll find usage of the protocol pretty much was non-exsistant with the first week having about 14 addresses and by week 3 only 9 addresses using the protocol.

In an effort to drive up usage furucombo posted on Feb 23 that now swapping would be rewarded. As a result there was a slight increase in usage but not much. By the last week and leading up to the last days of the rewards program there was still much of the rewards unclaimed. It wasn’t until a few days before the entire event ended, March 14th when swap functions were starting to be performed. These swap functions were performed over the remaining days of the event with a significant portion being traded on the last day. It appears of the ~45 address in the last epoch maybe 30 of them performed a significant amount of the swapping volume collecting significant rewards.

How were the rewards are distributed

Furucombo incentived various interactions on their protocol but built in a fee for each of these interactions.

The fees Furucombo takes is roughly 50-60% of the $ARB rewards in the form of $ETH fromt their users. So after the each epoch the user would be returned their fee they paid in $ARB + the reward as an incentive to attract usage. Each of the epochs the rewards were distributed within several days. The last epoch which ended on March 28, 2024 however has yet to be distributed.

What this means is from March 4 - March 28

  • Furucombo has collected $52,171 in the form of $ETH in fees from users
  • In return Furucombo was suppose to send 57,028 $ARB ($66,153 today’s price)
  • However, Furucombo has proposed rather than paying the promised amount they are suggesting they only send 8,500 $ARB ($9,859).

Essentially what this means is Furucombo is suggesting they steal $42,312 from their users


I am asking all users recieve $0 in rewards, due to a poorly handled PR I believe it is beyond fair to just zero everything out. I only ask all users simply get the funds Furucombo has taken. I am not even asking for interest or any rewards, just a reimbursement from what was taken.

What I think Arbitrum Should Propose

Due to miss handling of grant funds and poor PR from Hsuang-Ting. Arbitrum should distance itself from Furucombo and support the following:
1.) return all stolen funds to users
2.) All remaining funds to be returned to Arbitrum DAO
3.) Furucombo to permenantly be disqualified from any future Arbitrum grants

Last Words

I am sorry to have to bring this up to the the Arbitrum DAO I feel this could have been resolved in a professional manor between the users and Furucombo. I tried reaching out to Hsung-Ting and here is the message I had prepared for him which he never gave me the opportunity to share. Instead I was ignored and then on April 10 thats when I found out of the fees I paid and expected reimbursed 80% would be sent to Hsuan-Ting pockets.


Hey Hsuan-Ting,
I’ve been a participant of the most recent rewards program. In regards to the rewards program, I saw the updated post about including swaps in the program. I had done a few and then even shared in some tg groups about the furu program.

My thought was furu is incentivizing swaps so if they are incentivizing it then it’s fair game. But in any case I waited until the last week to allow others to participate till the end of the campaign.

After I heard the rewards were under review I re-read the campaign rules again (for a 3rd time) this is when I noticed for the first time that furu had a statement about to not abuse and that it would be reviewed. I had no idea that was stated. I don’t know if others were careful about their transactions but clearly looking at the dune analytics users would have been a lot more secretive about doing swaps if I or others were intentionally trying to hide and do something malicious.

I can’t speak for everyone but I fully believed I wasn’t doing anything wrong and still at this point am a bit unsure of the problem. My ask would be if there is a problem to reimburse the fees taken from the transactions. I think that is a fair ask. I and I am guessing others simply saw any activity as a win win, furu gets some users, rewards, as well. I had no intentions on other users being negatively affected as you see the rewards stayed available until the very end of the epoch to allow anyone an opportunity for the program. This was an honest oversight that seemed acceptable since it was incentived. It was not intended to hurt the community, protocols, or users.


Before posting this I have tried to reach out again to Hsuan-Ting. I wanted to give him time to respond about 3 days but when I saw his status turn from ‘last seen recently’ to ‘last seen a long time ago’ inn one day, that indicates he has blocked me. Without posting all the screenshots, you can see I gave a kind request and shared with him with full transparency what I intend on posting. Before escalating I went to him both privately and then kindly in their public tg. Once again ignored so I feel this is the next appropriate action.

Thank you for your input I look forward to hearing from community on this.


I was about to post about this, I am not sure why we are getting treated like this; I even defended them in Discord… At this point I just want the fees back

They ignored my ticket as well


Thank you for sharing this Billy

I also sent DMs to Hsuan and he completely ignored me + blocked me (telegram)

For some reason he completely avoided talking with the community

We should share this in discord, there are more victims

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They just banned me for posting this forum post in telegram, they are 100% scamming their users

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thank you for the @ they restricted my account for no reason


ignored on ticket :frowning:

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Thanks for taking the time to read our position on these allegations. Simply put, the users that received a reduction in rewards was because of wash trading, which Furucombo has had a stance to prevent since creating our campaign and submitting our proposal for funding.

Our stance on Wash Trading

Our stance to prevent wash trading can be found in our proposal, and our campaign details.

In our proposal for the STIP funding, we indicated that we would “focus on how we can reduce sybils, or reduce the amount of people gaming the system for rewards.”

In our campaign details we indicated that “upon receiving the bi-weekly rewards, the Furucombo team will do an internal review of the volume and reward breakdown to ensure that there are no participants attempting to game the system” (reference)

Campaign Changes

In order to allow more users to take advantage of the rewards (if they were actually utilizing Furucombo to manage their positions), we made some slight changes to our campaign.

On our report for Feb 22nd on our STIP program update, we indicated that we would add deposit, withdraw, repay, and borrow transactions to the kinds of transactions that would earn Arbitrum rewards. Originally it had just included Collateral swaps, Debt swaps, Leverage, and Deleverage.

Wash Trading

After the campaign details were updated, over the next few weeks we noticed a massive influx of transactions from many different wallets, all with the intention of wash trading by depositing and withdrawing their positions over and over. These transactions can be proven on-chain as wash trading transactions.

In an effort to pursue amicable ground, we provided truncated rewards to those users who wash traded. The list of said rewards (allocated vs. adjusted) can be found here.

Therefore we believe that these users had taken a predatory approach to our campaign, and should therefore not be allocated any Arbitrum tokens above and beyond what has already been distributed.

In response to the wash trading, the Furucombo team has frozen the rewards with the intention of getting the view of the Arbitrum DAO on how to proceed. If after deliberation the Arbitrum DAO wishes that the tokens be distributed, even in the event of wash trading, then we will do so.

Thanks again for taking the time to read our position. We hope this provides the Arbitrum community some insights into why we believe we have not acted in a malicious way, and that we have taken steps to minimize a loss from the Arbitrum community.


Let’s be real,
If Furucombo charged users $19.60 and give $20 in rewards, did you really give $20 in rewards?
This is the bogus claim Furucombo is making everytime they say the word reward.

Please take a look at the numbers. In the best case scenario where users recieved 100% of all rewards. Just look at how beneficial this was fo Furucombo vs the users. Just look at how they incentivized volume and in no world can you tell me that this system incentivizes users when $10,000 in volume gives the user 40 cents in rewards.

BEST CASE SCENARIO all covered by Arbitrum

Furucombo Earns: $52,171
Users Earns: $16,262

Even in the best case scenario for users, Furucombo was robbing Arbitrum blind. The STIP stated “100% of the grant funds will go back to users”, yes they do but Furucombo indirectly earned the majority of the rewards through ETH fees.


Now lets take a look at their “amicable” solution.


Furucombo Earned: $41,971 + 48,528 $ARB = $104,040
Users Paid Furucombo: $41,971


Ask yourself,

  • Why did Furucombo incentivize volume so intently
  • Why did they add swapping as a qualifier
  • Why did they never mention wash trading as a disqualifier until conviently after they pocketed tens of thousands of ETH fees from users. (wash trading was not mentioned in the post as eluded by Blazar)
  • Wash trading occured for more than 4 days. At no point did they make any attempts to defend it. No announcment, No stopping of rewards program, Not a single attempt to stop it.

The more I talk through this the more I begin to believe Furucombo has carfully planned away to extract as much money from users and arbitrum as possible. Furucombo has done everything possible to encourage and even trick users into thinking their actions were acceptable and Furucombo even doubled down in an effort to make themselves appeal benevolent as they rob users.

The reward system was predatory


As disapointed as I am with Furucombos mishandling of Arbitrum Grant I do appreaciate the opportunity to allow Arbititrum to decide the outcome. I will answer any questions I may about the entire process as I stand by my original proposal. I encourage anyone to look at the transactions as they are on chain. I believe the onchain history strengthens my arguement. Why did Furucombo make no attempts to mitigate any of their concerns after the significant amount of time they had to do so? I believe because these “wash trading” transactions never really were a concern to Furucombo. They enjoyed earning fees and didn’t seem to care, since in the end they knew they would just call the actions malicous in an attempt to make themselves appear innocent and collect significant fees in the process.


I am asking all users recieve $0 in rewards, due to a poorly handled PR I believe it is beyond fair to just zero everything out. I only ask all users simply get the funds Furucombo has taken. I am not even asking for interest or any rewards, just a reimbursement from what was taken. [can be ETH or ARB it does not matter]

What I think Arbitrum Should Propose

Due to miss handling of grant funds and poor PR from Hsuang-Ting. Arbitrum should distance itself from Furucombo and support the following:
1.) return all stolen funds to users
2.) All remaining funds to be returned to Arbitrum DAO
3.) Furucombo to permenantly be disqualified from any future Arbitrum grants

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I feel like Furu just changed the rules to their convenience (at the end of the campaign), simply predated on the fees…

One of Hsuan friends, so you guys understand who we are dealing with here…

He called me dumb for no reason. We are just trying to find a solution, and we want our money back, that’s all.

Dear @Arbitrum Community,

I am reaching out to share my concerns and experiences with the Furucombo platform, which have significantly impacted not only my trust but also my financial involvement with the protocol.

Despite multiple attempts to engage in constructive dialogue with the Furucombo team to seek clarity and resolution, my efforts were met with dismissive and unprofessional behavior. Notably, Hsuan Ting, CEO of Furucombo, openly mocked users, including myself, in the Telegram group for voicing legitimate complaints. This type of behavior undermines the community’s trust and raises serious concerns about the team’s commitment to user satisfaction and ethical conduct including Arbitrum community for incentivizing projects like this.

Furthermore, Hsuan Ting has now blocked several of us from communicating with him, effectively silencing our grievances and obstructing communication. This act of censorship is troubling and suggests an attempt to conceal the issues rather than address them transparently.

Given the lack of prior warnings or indications from the team that our actions were inappropriate or in violation of any terms, and the subsequent financial losses incurred due to their oversight, I am formally requesting a full refund of all fees paid while using their protocol.

The lack of accountability and transparency from the Furucombo team is alarming, and I urge the @Arbitrum team that consulted with Hsuan to address these issues promptly. I am tagging a few users i have seen on the forum that are active on the grant matter to please voice your opinions on this topic.
@tnorm @Matt_StableLab @RogerRadiant @cliffton.eth @ITUblockchain

Thank you for your attention to this matter. I look forward to your support and a resolution that honors the principles of fairness and transparency.

Posted here to request feedback 23 Apr 2024 - Open Discussion of Proposals Governance Call - #5 by Billy

I have now messaged the Arbitrum team in discord

Furucombo is requesting more funds, I cannot belive this :rofl:

@cliffton.eth @raam Please take a look :point_up: