Jul 14, 2023 Frank Stewskid
Multichain Ceases Operations Due to Lack of Funds, CEO in Police Custody: What Happened to Multichain?
Multichain, the cross-chain router protocol, has made a shocking announcement that it is compelled to halt its operations due to a lack of operational funds. This decision comes after a report from blockchain analytics firm Chainalysis, which suggests that the large withdrawals from Multichain that took place about a week ago were potentially a result of a "rug pull" orchestrated by insiders. Adding to the turmoil, Multichain's CEO, Zhaojun, is currently under Chinese police custody, leaving the global team without access to critical resources. In this article, we delve into the details of what transpired and explore the implications for Multichain and its users.
On July 14, Multichain's official Twitter account confirmed the suspension of operations due to a dearth of alternative sources of information and operational funds. The team expressed its inability to continue business activities, citing their reliance on the control of operational funds and investments held by their CEO, Zhaojun. Unfortunately, the team has been unable to establish contact with Zhaojun since his detainment by Chinese authorities.
1. On May 21, 2023, Multichain CEO Zhaojun was taken away by the Chinese police from his home and has been out of contact with the global Multichain team ever since. The team contacted the MPC node operators and learned that their operational access keys to MPC node servers had…
— Multichain (Previously Anyswap) (@MultichainOrg) July 14, 2023
According to Multichain's announcement, Zhaojun's family informed the team that the CEO's computers, phones, wallets, and mnemonic phrases were confiscated by the police. As a result, all operational funds and access to the servers are currently under Zhaojun's control, making it impossible for the team to continue normal operations. The Multichain saga began in May, when the protocol's routes were temporarily suspended for an upgrade, causing delays in fund transfers. These uncertainties surrounding the protocol prompted crypto exchange Binance to halt deposit and withdrawal support for certain Multichain bridged tokens. Compounding the situation, large outflows from the Multichain MPC bridge platform raised concerns of an exploit. On July 6, on-chain observers identified a hack as over $100 million worth of assets were withdrawn from the Fantom bridge on the Ethereum side, as reported by DeFi Teller.
Multichain's abrupt decision to halt operations due to a lack of funds has sent shockwaves through the crypto community. With the CEO in police custody and control over operational resources compromised, Multichain faces significant challenges in resolving the situation. Users and investors should exercise caution and monitor updates from the Multichain team for further developments. The implications of this event may have broader implications for the future of cross-chain protocols and highlight the importance of due diligence in the crypto space.
FAQ:
- Is Multichain safe and legit?
Given the recent events and the uncertainty surrounding Multichain's operations, concerns about its safety and legitimacy have arisen. Users and investors are advised to exercise caution and seek additional information before engaging with the platform. - How does Multichain work?
Multichain operates as a cross-chain router protocol, facilitating interoperability between different blockchain networks. For a comprehensive review of Multichain's functionality and features, please refer to our team's in-depth analysis. - Where was the official announcement made?
The official announcement regarding Multichain's cessation of operations was posted on the project's Twitter profile. - What actions are being taken to resolve the situation?
At present, the Multichain team is actively investigating the circumstances surrounding the lack of funds and the CEO's detainment. They are cooperating with the demands of Zhaojun's family and adhering to local laws and regulations. Updates will be shared with the community as the situation progresses.
