Suspicion Fuels as Crypto Wallet Capitalizes on Brief Multichain Bridge Opening
Summary:
A crypto wallet took advantage of a brief opening in the previously malfunctioning Multichain Bridge, turning 1.9 million FTM (worth about $280,000) into $1.9 million, prompting suspicions of inside information. The wallet withdrew the FTM from Binance, swapping it for Bitcoin via the Fantom Network, followed by a cross-chain transfer to Ethereum, receiving assets in WBTC, ETH, and USDT. Neither the Fantom Network nor Multichain has provided an official response.
A crypto wallet address successfully converted nearly 1.9 million FTM, worth around $280,000, into $1.9 million in a matter of hours. This capitalization came about because of a fleeting loophole in the previously ill-functioning Multichain Bridge, prompting accusations of potential insider involvement. Despite being inoperative since its security breach in July 2023, the Bridge was momentarily accessible on Nov.1 and then was promptly deactivated again. The opportune wallet seized this fleeting window to garner a sizable profit.
The Multichain Bridge, which has been out of commission since its barrage in July 2023, momentarily resumed operation and was then abruptly disengaged again on Nov. 1. Profiting from this fleeting window of function, the opportune wallet elevated its value by millions.
Certain assets depegged like WBTC are cheaper on the Fantom network than their Ethereum network counterparts. The timely opening allowed the cryptowallet to exchange FTM tokens for depegged assets on the Fantom network, and then transferring them to the Ethereum network to recover their full value.
The first move of the wallet address starting with 0x4372 was to withdraw 1.9 million FTM tokens from Binance. It then exchanged these FTM tokens for Bitcoin (BTC) on the Fantom Network. Using these BTC, it conducted a cross-chain transfer through the Multichain bridge to Ethereum and received revenues in WBTC, ETH, and USDT.
Subsequently, these assets were transported from the Multichain and deposited back to Binance. Nonetheless, the cryptocurrency community seemed more occupied with the Multichain executor than the wallet address itself. Back in July this year, the Multichain Fantom Bridge suffered a breach that cost over $126 million. Numerous ERC-20 assets along with a considerable sum of WETH, WBTC, and USDC were depleted.
The online platform X (earlier Twitter) was abuzz with suspicions about the deal's timing, alleging insider involvement as the wallet was the sole beneficiary of this window. Users commented that the Multichain - inactive for a stretch exceeding 120 days - only resumed activity in time for transactions that favoured this wallet.
As of now, neither the Fantom Network nor Multichain has provided an official statement on the issue.
Published At
11/2/2023 8:31:52 AM
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