Multichain Confirms CEO’s Arrest by Chinese Officials, Announces Winding Down Operations

The recently hacked cross-chain router protocol Multichain announced it is shutting down its operations, citing a lack of operational funds and information about its CEO Zhaojun, who is in the custody of Chinese police. The latest update provided by the team confirmed the rumors about the exec’s arrest.

On July 14, Multichain took to Twitter to reveal that Zhaojun has been out of contact with the team since being apprehended by the Chinese police from his home. His sister was taken into custody as well.

Multichain Shuts Down

Upon contacting the MPC node operators, the team was made aware that their operational access keys to MPC node servers had been revoked. They explained that the MPC node servers in question were running under the CEO’s personal cloud server account and that he had sole access to it.

The team also learned that all of Zhaojun’s computers, phones, hardware wallets, and mnemonic phrases were confiscated by the authorities.

“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 said they refrained from disclosing unauthorized information about the case to the public as per the lawyers’ suggestion.

Daily operations were conducted with the help of existing access to servers that had not been revoked, as well as with assistance from Zhaojun’s sister, who reportedly transferred the remaining user assets in the router pool and subsequently notified the team and several project parties of this asset preservation action.

With Zhaojun’s sister also out of contact, the Multichain team said the status of the preserved assets remains uncertain.

$130M Exploit and Subsequent Unravelling

Multichain – previously known as Anyswap – suffered an $8 million exploit in 2021.

But problems with first surfaced in late May this year, which involved rumors about the protocol’s management team being arrested in Shanghai after the CEO went missing. This later escalated after the $130 million exploit earlier this week.