Multichain, once a promising cross-chain router protocol, has found itself in a devastating situation. The company recently made the heart-wrenching decision to cease its operations due to a dire lack of operational funds. However, the financial struggles are not the only challenges faced by Multichain – its CEO, Zhaojun, is currently in police custody, adding to the overall distress of the company.
The rumors surrounding Zhaojun’s arrest have been confirmed by Multichain in a recent update on Twitter. The CEO was apprehended at his residence, and since then, he has had no contact with the Multichain team. To make matters worse, Zhaojun’s sister has also been taken into custody, leaving the company and its employees in a state of unease.
Key Revocation and Confiscation of Assets
Upon reaching out to the Multi-Party Computation (MPC) node operators, Multichain made a shocking discovery. Their access keys to the MPC node servers had been revoked. These servers were hosted under Zhaojun’s personal cloud server account, which afforded him exclusive control. The authorities have also confiscated all of Zhaojun’s electronic devices, including computers, phones, hardware wallets, and mnemonic phrases. This means that not only are the operational funds in the possession of Zhaojun and the police, but also critical access to servers and assets.
The Multichain team, guided by their legal counsel, made the difficult decision to withhold unauthorized information about the case from the public. Considering the severity of the situation and ongoing investigations, this was a necessary measure to protect the sensitive aspects of the case. Although this decision is crucial for legal reasons, it leaves the community and other stakeholders in the dark about the full extent of Multichain’s challenges.
Efforts to Preserve Assets
In an attempt to salvage what they can, Multichain made use of the remaining access to servers that had not been revoked. Their CEO’s sister has also played a vital role in facilitating the transfer of the remaining user assets in the router pool. These preserved assets have been notified to various project parties, but unfortunately, their current status remains uncertain due to the unavailability of Zhaojun’s sister.
Multichain was previously known as Anyswap, and it faced significant setbacks earlier this year. An exploit worth $8 million dealt a heavy blow to the project’s progress. However, the situation worsened with rumors of the arrest of the management team in Shanghai following Zhaojun’s mysterious disappearance. The recent occurrence of a $130 million exploit has further added to the company’s woes, exacerbating an already dire situation.
The Final Blow
With a severe lack of operational funds and the arrest of their CEO, Multichain had no choice but to announce the discontinuation of their operations. The struggles faced by the company serve as a stark reminder of the challenges encountered by blockchain projects. Security measures must be robust and resilient to safeguard against potential breaches, hacks, and unforeseen misfortunes.
Multichain’s unfortunate series of events acts as a cautionary tale for the entire blockchain industry. It highlights the importance of ensuring sufficient operational funds to sustain ongoing activities. Furthermore, a strong system of checks and balances should be in place to prevent a single individual from possessing sole control over critical assets and funds.
Multichain’s downfall is a harrowing story of hacking, financial struggles, and the arrest of their CEO. The uncertainties surrounding the company and the preserved assets are a testament to the challenges faced by blockchain projects. This cautionary tale emphasizes the need for enhanced security measures and better risk management practices within the industry.
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