Multichain Terminates Operations Citing CEO and Sister Detention by Chinese Police
Multichain bridge protocol confirmed halting operations, citing insufficient funds to run. The announcement conveyed on Friday, July 14, via the Multichain (MULTI) official Twitter account revealed the closure citing unawareness of chief executive Zhaojun’s whereabouts.
The closure of the bridge protocol was bound to happen since news of Zhaojun’s detention by the Chinese police. The tweet indicated that running Multichain became untenable following a move by an unknown party to impound the operational funds.
Multichain Hit with Transfer, Arrest, and Lost Funds
Multichain challenges traced to late spring when the users flooded the cross-chain bridge Telegram alleging noncompletion of transfers executed. The users claimed the transfers showed pending status, signaling they were stuck.
The outcry of users coincided with rumors that several Multichain executives were under the custody of the Chinese authorities. The speculators considered chief executive Zhaojun among the individuals apprehended during the arrest by the Chinese enforcement officers conducted on May 21.
The Multichain protocol would later confirm Zhaojun was missing. It explained the stuck transfers were inevitable since he exercised sole access to the servers that would resolve the delays. With the chief executive out of reach, the global Multichain team confirmed with the MPC node operators that operational access keys to the servers were revoked.
The team admitted that the MPC node servers were running using the personal cloud server account held by Zhaojun. The team could not access the server account; hence unable to log on to the MPC servers.
Chinese Officers Raid and Confiscate Zhaojun’s Devices
The Multichain team revealed that the Chinese police confiscated devices Zhaojun owned during the arrest. The items confiscated during the raid included mnemonic phrases, devices, and crypto hardware wallets.
The Multichain team resorted to sustaining project operations using the access on the nonMPC servers not revoked. By then, the team refrained from disclosing Zhaojun’s disappearance. Also, they avoided issuing unauthorized details concerning the case as local laws and regulations required.
The July 14 tweet by the Multichain validates the rumors that Zhaojun is in police custody.
The confiscation impounded the funds the team relied upon to run the cross-chain bridge protocol. The development made it inevitable for the team to shutter operations.
Uncertainty Surrounds the Preserved Assets Following Zhaojun Sister Arrest
The Multichain team highlighted that Zhaojun’s relative successfully accessed the cloud server using historical information from his home computer. The family granted Multichain team engineers to physically access the desktop physically, thereby fixing technical issues emerging from two routers. The quick fix enabled Multichain partially restore operations.
The Friday tweet from the Multichain tweet details that Zhaojun’s sister would access customers’ assets by leveraging login information from the cloud server using a Kunming-based IP address. She accessed the assets locked within the multiparty computation (MPC) wallets and initiated transfers to the wallets she controlled. The sister duly notified the team concerning the transfer to preserve the assets. The move was necessary given that the team witnessed an abnormal transfer on July 7 involving user assets within the MPC addresses.
The team reports that transactions estimated to involve over $200 million were offloaded in a manner akin to exploiters’ activities.
The tweet indicates that the Zhaojun family notified the Multichain team of the sister’s arrest. At the time of writing, the sister is unreachable, with the status of the assets she helped preserve is uncertain.
The Multichain tweet cites the lack of access to information and operational funds as reasons for the team to cease operations. The team assured the users and investors that it would readily provide updates upon its discovery.
The team confessed that the team lacks access to the domain account necessary to redirect and shut the front end. The team appeals to users, warning them the Multichain services are unavailable. They petition GoDaddy to help terminate the front end multichain.org.
