- The multichain protocol says recent events forced it to suspend operations.
- CEO Zhaojun and his sister were reportedly detained and lost operating funds from the team.
- On July 6, $125 million was stolen from Multichain, prompting blockchain security firm Chainalysis to point to possible insider fraud.
multi chainOne of the world’s largest cross-chain bridge protocols has announced it will cease operations. The news comes just days after the protocol confirmed that his $125 million had been exfiltrated from the protocol’s wallet by an attacker (believed to be an inside job).
According to linkage analysis report, a mysterious withdrawal on July 6 contained $120 million from a multi-chain Fantom bridge. The blockchain security firm said in a report that “unusually large fraudulent withdrawals” are like pulling a rug.
as CoinJournal covered herethe world’s largest cryptocurrency exchange Binance has suspended deposits and withdrawals of multi-chain bridge tokens due to previous incidents involving multi-chain protocols.
Multichain stops operations
Multichain has been in the news constantly for the past few months, especially since May when it was reported that CEO Zhaojun was arrested by Chinese police.
Authorities allegedly seized “computers, phones, hardware wallets and memory phrases” when detaining the CEO. Notably, Zhaojun controlled all of the protocol’s operating funds and investments.
1. On May 21, 2023, multichain CEO Mr. Zhao Jun was taken from his home by Chinese police and has not been contacted by the global multichain team since. The team contacted his MPC node operator and confirmed that the operational access key to the MPC node server was…
— Multichain (formerly Anyswap) (@MultichainOrg) July 14, 2023
Zhaojun’s sister, who recently transferred remaining user assets to an address under her control, was also detained. This sequence of events and the “lack of alternative sources and corresponding operational funding” were what forced Multichain to shut down, according to an announcement posted on the protocol’s Twitter page.
“On July 13, police detained Mr. Zhao’s sister, according to information provided by Mr. Zhao’s family. Currently, I have not been able to contact Mr. Zhao’s sister. Due to the uncertainty of the status of her assets that she has stored, the team believes it is necessary to keep the community informed of all known conditions.Lack of alternative sources and corresponding operating funds forced the team to cease operations”
As of Friday morning, the price of MULTI has fallen 4% over the past 24 hours and more than 16% over the past week. What happens next for MULTI is unclear, but it could plummet further. The recent alleged rug-pulling move hasn’t helped prices.
