Multichain will be shutting down services as a result of the CEO “being taken away by the police” and the issues the team has faced afterwards.
Multichain unable to access funds
Multichain, a cross-chain protocol formerly known as Anyswap, took to Twitter on July 14 to reveal a rundown which began with the arrest of CEO Zhaojun by Chinese authorities on May 21, stating that the company has been unable to communicate with Zhaojun since his arrest.
Information given by Zhaojun’s family revealed that authorities confiscated the CEO’s phones, computers, mnemonic phrases and hardware wallets. The seizure, meanwhile, meant that the Multichain team was unable to access any funds since the Zhaojun had sole control of the platform’s multi-party computation (MPC) node servers, which were now under the police’s control.
While the protocol continued to function after Zhaojun’s arrest with limited funds, the CEO’s family allowed the Multichain engineering team to gain physical access on June 4 to the home computer to fix issues affecting two routers. A month later, the platform revealed that there was an unusual movement of funds worth over $125 million, which was discovered with the help of Zhaojun’s sister.
In a bid to preserve the remaining user funds, the CEO’s sister moved customer assets to wallets under her control and notified the Multichain team, as stated by the platform.
However, Chinese police also took Zhaojun’s sister into custody, with Multichain unable to reach out to her. The team also said that “the status of the assets she has preserved is uncertain.”
With Multichain unable to access funds following the arrests of both its CEO and his sister, the company has been forced to shut down operations.
“Due to the lack of alternative sources of information and corresponding operational funds, the team is forced to cease operations. If there are any further notifications and developments, the team will update the community accordingly.”
The Multichain team said on Twitter.
Where it all began
The issues surrounding Multichain started in May after users complained about a delay in getting their funds due to a backend upgrade that was taking a long time to complete. There were also rumors of the Chinese authorities arresting Multichain’s development team. Amid the reports of delayed funds and the rumors of the arrest, there was a huge selloff of the Multichain token by holders.
Following the abnormal movement of funds reported on July 7, Circle froze $63 million in USDC while Tether took a similar action against two wallet addresses holding 2.53 million USDT combined.
Multichain has also requested the internet domain and hosting platform GoDaddy to help bring down its website.
