The Multichain protocol has just confirmed that its CEO, Zhaojun, was indeed arrested by Chinese authorities at the end of last May. In doing so, the Multichain teams find themselves with no way out because all the information necessary for the proper functioning of the protocol was under the responsibility of Zhaojun. Consequently, Multichain announces that it is ending its activity.
Multichain CEO Definitely Arrested in China
The Multichain soap opera is coming to an end. While rumors began to emerge at the end of last May about a potential arrest of protocol CEO Zhaojun, these have just been confirmed by the team itself a week after hundreds of millions dollars have evaporated.
1. On May 21, 2023, Multichain CEO Zhaojun was taken away by the Chinese police from his home and has been out of contact with the global Multichain team ever since. The team contacted the MPC node operators and learned that their operational access keys to MPC node servers had…
— Multichain (Previously Anyswap) (@MultichainOrg) July 14, 2023
Thus, after having been discreet for a while, the Multichain teams spoke on Twitter on July 14 to take stock of the situation. It would finally turn out that Zhaojong was indeed arrested by the Chinese authorities at his home on May 21., who also confiscated all of his computer equipment. We also learn that the CEO of Multichain is the only holder of the keys giving access to the operational funds of the protocol, in addition to access to the servers.
Besides, it would seem that the security of Multichain was limited to appearances. Indeed, Multichain uses the Secure Multiparty Computing (MPC) process to secure its smart contracts, which is theoretically supposed to prevent a single individual from accessing a wallet through private key fragmentation. Except that these MPC nodes were all stored in a cloud owned by Zhaojongleaving the Multichain team with no way out for some time.
Later, on June 4 exactly, the Multichain teams were able to solve the technical problems that the protocol had encountered after the CEO’s family opened access to his computer’s history.
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End clap for Multichain
Also according to the Multichain press release, the 220 million dollars recently transferred – transfers so far considered to be the result of a hack – were actually moved by Zhaojun’s sister to wallets under her control.
Except that Chinese authorities also arrested Zhaojun’s sister on July 13, and the Multichain teams are therefore unable to get their hands on these funds. Thus, the protocol team said that they found themselves forced to terminate their activities:
“Today, Zhaojun’s sister is also unreachable. The condition of the property she kept is uncertain. The team therefore believes that it is necessary to inform the community of all known circumstances. Due to the lack of other sources of information and corresponding operational funds, the team is forced to cease its activities. In case of new notifications and new developments, the team will update the community accordingly. »
Multichain said it was unable to shut down the front-end of its site, and recommends its users to stop using the protocol, although it is still live. The MULTI token has lost 36% over the past 30 days and is currently trading around $2.17, its all-time low.
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Passionate about the world of decentralized finance and the novelties brought by Web 3.0, I write articles for Cryptoast to help make blockchain more accessible to everyone. Convinced that cryptocurrencies will change the future very soon.
Maximilien Prue
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