Chinese Cross-Chain Protocol Multichain Faces Major Setback as CEO and Core Team Arrested
Summary:
Chinese cross-chain protocol Multichain experienced a major setback when its CEO and core team were arrested by Chinese authorities. The arrest, reasons undisclosed, led to the shutdown of the protocol and the loss of $1.5 billion in locked value. Victims have formed a group seeking answers, while frozen funds are being distributed to victims. The Chinese government has not provided any information or returned the missing funds. Multichain's exploit is considered one of the worst crypto hacks of 2023.
The CEO of the Chinese cross-chain protocol Multichain, known as "Zhaojun He," and the core team operating in Shanghai, were arrested by Chinese authorities on May 21. The reason for the arrest and the charges against Zhaojun were not disclosed. However, there is evidence suggesting that Multichain funds may have been seized as part of an anti-money laundering operation. The Multichain team confirmed that the protocol's servers and private keys were under the exclusive control of Zhaojun, which were handed over to the police. As a result, the protocol had to shut down, and $1.5 billion in locked value became inaccessible. Attempts to rescue users' assets resulted in further arrests. A victims group was formed, with over 300 members. Victims reached out to Chinese embassies and police in their home countries but received no response. Fantom Foundation has hired attorneys in China to assist in the recovery process, and frozen funds are being distributed to victims. Circle and Tether have frozen over $65 million in assets associated with the hack. Many individuals, such as freelance content creator PJ Krypto and crypto investor ArkRide, have lost significant amounts of money due to the Multichain exploit. Investigations have revealed concerning information about the actual directors of Multichain, hinting at possible pseudonyms and fraudulent practices. Chinese authorities have accused Zhaojun of money laundering through the Multichain protocol. The seizures of protocol assets, both legitimate and tainted, are allegedly part of a corruption scheme by the police. Investors have not received any information about the charges against developers or the process for recovering their funds. The Chinese government has not answered questions or provided any explanation regarding the disappearance of the funds. Multichain's exploit is considered one of the worst crypto hacks of 2023.
Published At
8/23/2023 3:00:00 PM
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