The Multichain protocol has just confirmed that its CEO, Zhaojun, was indeed arrested by the Chinese authorities at the end of May. This leaves the Multichain teams with no way out, as all the information needed for the protocol to function properly was under Zhaojun’s responsibility. As a result, Multichain has announced that it will cease trading
The CEO of Multichain has been arrested in China
The Multichain soap opera is coming to an end. While rumours began to emerge at the end of May about the potential arrest of the protocol’s CEO, Zhaojun, these have now been confirmed by the team itself, a week after hundreds of millions of dollars disappeared.
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
After keeping a low profile for some time, Multichain’s teams took to Twitter on 14 July to provide an update on the situation. It turns out that Zhaojong was indeed arrested by the Chinese authorities at his home on 21 May, who also confiscated all his IT equipment. We have also learned that Multichain’s CEO is the sole holder of the keys giving access to the protocol’s operational funds, in addition to access to the servers.
Moreover, it would appear that Multichain’s security was limited to appearances. In fact, Multichain uses secure multi-party computing (MPC) 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 Zhaojong, leaving the Multichain team with no way out for some time.
Later, on 4 June to be exact, the Multichain teams were able to resolve the technical problems that had plagued the protocol after the CEO’s family opened up access to his computer’s history.
Clap de fin pour Multichain
According to the Multichain press release, the $220 million recently transferred – transfers hitherto thought to be the result of a hack – were in fact moved by Zhaojun’s sister to wallets under her control.
Except that the Chinese authorities also arrested Zhaojun’s sister on 13 July, and the Multichain teams are therefore unable to get their hands on these funds. As a result, the protocol team stated that it was forced to cease its activities:
“Today,
will be closed.
Today, Zhaojun’s sister is also unreachable. The state of the property she has kept is uncertain. The team therefore considers it necessary to inform the community of all known circumstances. Due to the absence of other sources of information and the corresponding operational funds, the team is forced to cease its activities. In the event of new notifications and developments, the team will inform the community accordingly. “
Multichain said it was unable to shut down the front-end of its site, and recommends that its users no longer use the protocol, although it is still online. The MULTI token has lost 36% over the past 30 days and is currently trading at around $2.17, its all-time low.
