A prominent bridging protocol, Multichain, has recently announced that it is forced to cease operations because it lacks sufficient operational funds. This decision comes on the heels of a report by Blockchain analytics firm Chainalysis, which claimed that the withdrawals could possibly be the result of an internal rug pull.
Multichain made a significant announcement on July 14 through its official Twitter account, where the team explained that the reasons behind this decision are the lack of alternative sources for obtaining information and the corresponding insufficiency of operational funds. As a result, they are forced to shut down their business activities.
The tweet also shed light on an additional concern raised by the Multichain team, stating that they have been unable to establish contact with their CEO Zhaojun, ever since he was detained by Chinese authorities.
The team further revealed that they have reached out to Zhaojun’s family who informed them that his computers, phones, wallets, and mnemonic phrases were confiscated by the authorities.
The team elaborated, stating “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.”
Furthermore, the team revealed that they were informed by Zhaojun’s sister about an asset preservation measure that involved transferring some funds to addresses under her control.
However, the situation took another unfortunate turn as the Multichain CEO’s family later notified the team that Zhaojun’s sister has also been apprehended by the authorities and is currently unreachable. As a result of these developments, the team has made the decision to halt their operation.
The vulnerability of the protocol was highlighted just last week when it fell victim to an exploit, resulting in the loss of $130 million as the attackers drained funds from the Multichain token bridge.
In a Twitter thread, Multichain stated, “According to information provided by Zhaojun’s family, the police took Zhaojun’s sister into custody. Now, Zhaojun’s sister is also out of contact. The status of the assets she has preserved is uncertain, so the team believes it is necessary to inform the community about all the known circumstances.”
