By Mark Hunter
1 hour agoMon Jul 17 2023 07:51:45
Reading Time: 2 minutes
Multichain will close down following the arrest of its CEO, Zhaojun
Zhaojun retained access to all the servers and crypto wallets
Multichain has admitted that it cannot continue operating under these conditions
Multichain recently announced that it is winding down operations following a crippling hack and the arrest of its CEO, Zhaojun. The project said on Friday that a lack of operational funds is behind the decision while confirming that Zhaojun is in police custody following his ‘disappearance’ last month. The Multichain bridge was exploited earlier this month for $126 million which has left it unable to function, and with no CEO, at least for the short term, those left in charge have decided to wrap up the project.
Zhaojun ‘Missing’ Since May
Multichain announced at the end of May that it had experienced “multiple issues due to unforeseeable circumstances”, namely that Zhaojun had gone AWOL. This followed suggestions that the entire Multichain team had been rounded up by Chinese police, but this has now been proven not to be the case.
Unfortunately for users, Zhaojun was the only one with complete server access, and as a result, the project asked users to stop using the service while it tried to find a workaround. This issue came after other problems related to trapped user funds and a sell-off of its MULTI token, with users complaining that they couldn’t access funds they had entrusted to the bridge.
Multichain Can’t Carry On
Following the devastating hack, on July 14 Multichain confirmed that Zhaojun had been arrested along with his sister on unspecified charges, leading to a collapse in the value of the MULTI token. His arrest, and the consequent confiscation of all his devices, meant that the Multichain team has now been essentially locked out of its own protocol:
Since the inception of the project, all operational funds and investments from investors have been under Zhaojun’s control. This also means that all the team’s funds and access to the servers are with Zhaojun and the police.
The Multichain team has therefore had no choice but to bring things to a halt, with users losing all funds held on the bridge, which may well end up with Chinese authorities.
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