Case File · GEI-2026-0426 · DeFi arbitrage-bot approval drain

The Arbitrage Bot That Asked for Everything: An Approval-Drain Case

ArbiPulse promised hands-off arbitrage profits. The only setup step was to approve the bot’s contract. A Calgary marketing manager clicked approve once — granting unlimited spending on her tokens — and the drain followed within the hour.

Vector
DeFi yield / arbitrage-bot (malicious token approval)
Instrument
Unlimited ERC-20 approval drain
Reported loss
CA$ 69,500 (ETH, USDT (Arbitrum))
File opened
26 April 2026
Funds recovered
23%
Claimant
Marketing manager, Calgary, Canada
About this case file. This is an illustrative, dramatized composite based on patterns GEInvestigator works in the field. Names of firms, platforms, and people are fictional and any resemblance to a real entity is coincidental. Figures and outcomes are representative; recovery is never guaranteed and depends on the facts of each case.

IntakeHow the subject made contact

She onboarded through a polished ArbiPulse dApp and a paid influencer clip that promised steady, “risk-free” arbitrage returns. The setup was a single step: connect the wallet and “activate the bot.”

The activation prompt was an unlimited token approval. Framed as switching the bot on, it instead granted the contract permission to move her tokens without limit.

Point of compromiseWhere control was lost

Within the hour the contract pulled her USDT and swapped ETH on Arbitrum. The funds were bridged to mainnet, split, and most routed through a mixer; a remainder continued to a centralised exchange.

Nothing was ever “deposited” in the sense she understood. Her own signature, given once, was the entire mechanism of the loss.

“I thought I was switching it on. I was actually handing over the keys to my own tokens, with my own signature.”Field interview · Case GEI-2026-0426

Evidence chainHow the recovery was built

EX-01

Decoded the fatal signature

Identified the transaction as an unlimited-approval grant rather than a deposit — the moment custody effectively transferred.

EX-02

Built the drain timeline

Matched each token pull to the approval, establishing the exact window and the Arbitrum-side destinations.

EX-03

Tracked the bridge to mainnet

Followed the consolidated funds across the bridge and through the swap-and-split on the destination chain.

EX-04

Filed on the exchange remainder

The non-mixed remainder reached a centralised exchange; we submitted the trace and a Canadian fraud-report reference.

EX-05

Closed out the recoverable leg

The exchange returned the held remainder; we also walked the claimant through revoking the still-live approval to stop any repeat.

DispositionWhat came back

23%
Funds returned to claimant

CA$ 16,000 of CA$ 69,500 was returned. Approval drains move fast and lean on mixers; the durable win here was revoking the open approval so the loss could not repeat, plus recovering the one leg that surfaced at an exchange.

IndicatorsFraud signals on this file

  • A “bot” or dApp whose entire setup is a single token approval, especially for an unlimited amount.
  • Guaranteed or “risk-free” arbitrage or yield with no mention of counterparty risk.
  • Wallet prompts that read as “approve” or “enable” rather than a defined-amount transfer.
  • Influencer clips that link straight to a connect-wallet page with a countdown.

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