Chaos Unfolds At Multichain: CEO Detained On Heels Of Staggering $126M Crypto Drain

Zinger Key Points
  • "The series of events has left the Multichain team with no alternative but to cease operations."
  • On May 21, Zhaojun was taken into custody by Chinese police.

Multichain MULTI/USD CEO Zhaojun has been detained by Chinese authorities, just days after the company issued an urgent warning that approximately $126 million worth of cryptocurrencies were drained from its platform.

Zhaojun's sister was also detained.

Multichain, once a prominent crypto bridging protocol, stated that it is adhering to local laws and cooperating with Zhaojun's family and legal counsel, while also suspending operations.

What Happened: On May 21, Zhaojun was taken into custody by Chinese police. As a result, Multichain's servers, which were under Zhaojun's personal cloud server account, were inaccessible to the rest of the team.

Further complications arose when it was discovered that all of Zhaojun's personal devices, which held the keys to the company's operational funds and investments, were confiscated by the authorities.

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On May 30, the team informed the community about Zhaojun's disappearance and the technical issues they were facing.

What It Matters: On July 7, user assets locked on the MPC addresses were suspiciously transferred to unknown addresses.

Zhaojun's sister, whose name hasn't been disclosed, found evidence of unauthorized login from an IP address in Kunming on the cloud server platform. She subsequently transferred the remaining funds to EOAs, or externally owned accounts, under her control on July 9.

However, on July 13, she too was taken into custody by the police, leaving the status of the preserved assets uncertain.

"The series of events has left the Multichain team with no alternative but to cease operations," the company stated.

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