HomeNEWSMultichain suspends operations as crisis deepens

Multichain suspends operations as crisis deepens


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The controversy around Multichain has attained a new height after the project team announced that it has ceased operation. According to the team, the cross-chain router protocol will stop functioning due to lack of operational funds. The team provided a detailed update regarding the host of issues that led to the present situation.

Via its official Twitter page, the team cited how the arrest of Multichain CEO’s sister became the straw that broke the camel’s back. Further, the team established how it has been struggling in the past to remain active after the Chinese Police arrested its CEO, Zhaojun on May 21, 2023. Due to that, the team couldn’t access the project’s server and funds because they were under the control of its CEO. 

However, the team through the family of Zhaojun learned that all of its CEO’s computers, phones, hardware wallets, and mnemonic phrases were confiscated by the authorities. Multichain, according to the team, managed to stay afloat due to community efforts and the eventual intervention of Zhaojun’s sister. Now, her arrest has left the team with “lack of alternative sources of information and corresponding operational funds.” Compelling the team to cease operations.

How Multichain has been the subject of high-profile controversies in the past

Meanwhile, the recent development further deepens the crisis around the cross-chain router protocol. Recall that in May 2023, the protocol’s routes were halted forcing the transfer of funds to take much time. Then, the Multichain team attributed the delay to an upgrade on its protocol. The issue compelled top exchanges like Binance to withdrawal support for Multichain.

In July 2023, Chainalysis notified the crypto community about a potential rug pull worth $125 million from Multichain. The firm asserted that the exploit could have manifested owing to a compromised administrator’s keys. This submission stated that it could have been an “inside job.”

More so, in this recent revelation, the day which Zhaojun’s sister transferred the remaining of users’ funds coincides with when Chainalysis reported an outflow of $125 million. Also, before then in January 2022, Multichain lost $1.4 million to an exploit on its platform. According to a Binbits report, the attack surfaced as a result of a bug that affected six tokens on the protocol. 

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David Idowu
David Idowu
David Idowu is a crypto reporter and trader with wealthy years of experience. He believes that blockchain technology has numerous opportunities that are begging for proper utilization. Away from work, David is either reading about World Politics, History or Tech Innovations.

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