Following the arrest of its CEO, Zhaojun, on May 21, 2023, the Multichain protocol, a cross-chain router protocol, has been left in limbo. The arrest resulted in a number of operational difficulties, including the revocation of operational access keys to the Multichain’s MPC node servers, which were under Zhaojun’s personal control.
Because the servers and operational finances were under Zhaojun’s control, the Multichain team lost access to them. Despite the difficulties, the team managed to keep project operations running to the best of their abilities by retaining access to several non-MPC servers that had not yet been revoked.
On May 30, the team informed the community of Zhaojun’s absence as well as the technical difficulties they were experiencing. However, on July 7, user assets locked on MPC addresses were unusually transferred to unknown addresses, exacerbating the situation. On July 9, Zhaojun’s sister, who had gotten access to the cloud server platform, transferred the remaining user assets in the router pool to her EOA addresses.
However, Zhaojun’s sister was apprehended by authorities on July 13, leaving the fate of the stored assets unknown. As a result of the absence of other sources of information and operational finances, the Multichain team has been forced to halt activities.On July 8, stablecoin issuers Circle and Tether froze approximately $65 million in assets linked to the alleged Multichain hack in response to the huge, unauthorised withdrawals from Multichain on July 6. Chainalysis, a blockchain security and analytics firm, classified the July 6 withdrawals as a likely rug pull, implying that it was an inside job. Despite these precautions, the future of Multichain remains questionable, with the team advising customers to discontinue usage of the service. On July 10, it was reported that the Multichain Executor address was draining anyToken addresses across many chains, resulting in the loss of roughly $263,524.33 in tokens.