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John Martin 23 Aug 2023 ◦ 4 min read

The Multichain Story: Updated

The Multichain Story: Updated

On July 6, Multichain ($MULTI) experienced an unusual cash outflow through bridge contracts from an unidentified address, leading to speculation about a vulnerability worth millions of dollars. Although the reason for the transfer is unknown, the Multichain team requested that users withdraw any allegations related to its contracts.

Multichain as a Blockchain Platform

Multichain is a well-known platform in the field of decentralized finance (DeFi), used for token swapping, staking, and trading.

The platform allows you to perform operations without intermediaries and extra costs for converting digital assets between dozens of different blockchains. It supports over 2460 tokens.

The main task of the platform is to ensure mutual compatibility among different blockchains. Such services operate using software smart contracts, which enable the conversion of crypto assets from incompatible ecosystems (i.e., tokens from one blockchain into tokens from another) without the need for intermediaries.

According to the analytical service DefiLlama, the total value locked (TVL) in Multichain, in dollar terms, is $1.25 billion.

Last Multichain News

The developers of the Multichain cross-chain router officially confirmed the hacking incident in an interview with representatives from CoinDesk. According to preliminary data, users lost tokens worth $130 million. The creators of the blockchain project have temporarily suspended the service and issued a warning to their customers about the potential risks.

They said the startup team "is currently conducting its investigation of the incident." Experts also warned that all transactions across the bridge will be delayed in the supply chains. Multichain representatives, in turn, noted on Twitter that the assets had been "transferred to an unknown address." They also mentioned that the team was uncertain about what had occurred and that an investigation was currently in progress.

According to the report, in recent years, $2.66 billion of crypto were stolen from Multichain as a result of Multichain hack exploits. Experts at PeckShield claimed that user losses amounted to $1.92 billion.

The developers have confirmed that the attackers were able to withdraw cryptocurrency funds totaling almost $130 million from bridges in the Fantom, Moonriver, and Dogechain networks. Researchers at the analytical company Lookonchain claimed losses of $62 million in USDC, $31 million in wBTC, and $13 million in wETH.

Binance has stopped supporting Multichain tokens.

Despite CEO Changpeng Zhao of Binance offering assistance in resolving the situation, Binance has decided to cease support for the deposit and withdrawal of funds for several tokens using a multichain bridge.

The company announced its decision to stop supporting multi-chain bridge tokens on July 5th, following complaints about transaction delays within the bridging protocol. Initially, the exchange suspended deposits of the affected tokens in May due to uncertainty related to the Multichain protocol.

Rumors spread about the arrest of the protocol leadership in Shanghai following the CEO's disappearance. Although the assumptions have not been confirmed, Multichain developers have reported that the CEO's disappearance has left them without access to the platform servers. As a result, transactions are delayed.

Technical Issues and Recent Developments for Multichain

In recent weeks, Multichain has encountered technical problems that have not been reported in detail. On May 31, the company announced that their CEO was missing, and they faced numerous challenges due to unforeseen circumstances, resulting in a delay in transactions. These technical problems may be contributing to the current situation.

On July 5, Binance, a well-known cryptocurrency exchange, suspended the withdrawal of certain derivative Multichain tokens. The shutdown occurred because the network was unable to process transactions promptly.

Conclusion

The Multichain cross-chain swaps, which are used to transfer tokens between blockchains, experienced a collision with an outflow of assets valued at over $120 million.

This caused panic among seals and concerns within the community regarding the use of a vulnerable network. While the investigation is underway, the Multichain team has acknowledged the unusual nature of the transactions and is actively working to determine the cause. The situation underscores the significance of implementing strong security measures and maintaining constant vigilance in the blockchain ecosystem. This is crucial to safeguard user assets and uphold confidence in the industry.

Hacking the cross-chain protocol and theft of user funds remain commonplace in the field of cryptocurrencies. This case once again confirms that security and data protection remain priorities for everyone utilizing blockchain technologies.

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