Multichain To Shut Down Protocol, Team Say CEO's Sister Was Arrested After Moving $220 Million In User Funds

The CEO's sister was arrested in China days after she moved $220 million in user funds to wallets under her control. Multichain's team also confirmed the news that CEO Zhaojun was arrested by China police in May.

Timeline of Multichain

The Multichain hack could potentially be a “rug pull,” as an additional $103 million in funds were recently drained. Multichain, which is described as a cross-chain bridge protocol, reportedly saw another $103 million transferred to other blockchain addresses.

On July 6, 2023, the Multichain Protocol was hit by a massive hack, resulting in the loss of over $125 million worth of cryptocurrency. The attack targeted the protocol's Fantom bridge, resulting in the theft of valuable crypto assets like WBTC, USDC, DAI, wETH, and Link.

In what is being considered one of the largest cryptocurrency hacks to date, cross-chain bridge Multichain fell victim to a devastating breach resulting in the loss of $125 million. Recent reports from blockchain data firm Chainalysis suggest that the exploit may have been an inside job, leaving the cryptocurrency community stunned and searching for answers.

The contract has used an “anySwapFeeTo” function to transfer hundreds of thousands of dollars worth of tokens to itself, which on-chain sleuth Spreek suspected may have been malicious.

Blockchain analytical firm Chainalysis suggested that Multichain's (MULTI) recent exploit could be a rug pull from insiders, according to a July 10 report on the incident. While DeFi hackers have a specific affinity for targeting cross-chain bridges, this one is quite suspicious due to the issues facing Multichain before the incident, according to Chainalysis.

Blockchain security and analytics firm Chainalysis has suggested that the multimillion-dollar exploit of the Multichain Protocol could be indicative of a rug pull. Multimillion Dollar Exploit Was Inside Job?

Multichain has recently experienced a wave of significant abnormal outflows over the past 12 hours, resulting in assets worth approximately $117 million being transferred to a new address: 0x1e

In the past 12 hours, a large amount of assets has unusually flowed out from Multichain. These assets, which include a variety of cryptocurrencies, have been transferred to the new address: 0x1eed63efba5f81d95bfe37d82c8e736b974f477b.

Blockchain security firm CyVers is claiming first in uncovering the Multichain mega hack that saw over $126 million pilfered from the protocol. As was previously reported, Multichain halted its network on the hack just a month after the entity's CEO disappeared.

Stablecoin issuers Circle and Tether have initiated action and blacklisted more than $67 million of stolen funds in USDC and USDT, which is around 50% of the stolen amount from the cross-chain protocol.