Decentralized Web 3 cross-chain router purportedly controlled by one person

Imagine a system where all your money is controlled by one man and his family, and when there is cause for concern, the propaganda machine immediately goes “brrr” and pretends all is well despite some egregious withdraw money. Sounds more like a one-party state? No, welcome to blockchain, especially multichain.

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Man alleged to be Multichain co-founder and CEO Jun Zhao (CryptoRank)

On July 14, China’s decentralized cross-chain bridge agreement Multichain announced that it would cease operations after three years. reason? The only people who are said to hold the private keys to over $1.5 billion in user cryptocurrencies stored on Multichain are its co-founder and CEO Jun Zhao, and later his sister (whose name has not been identified). Both were arrested by Chinese police for reasons that remain unclear.

According to reports, Zhao Jun was arrested as early as May 21, but the staff of Multichain seem to not want you to know this…Until now, one contradiction after another has kept the truth from being covered up.

The whole ordeal began around May 24, when Multichain users reported that funds hadn’t arrived nearly 72 hours after they were sent. The administrator immediately responded that the delay was due to the backend node upgrade “taking longer than expected” and that “all affected transactions will arrive after the upgrade is complete.”

“Most routes are operating as usual, some routes (Kava, zkSync, Polygon zkEVM) are temporarily suspended. All affected transactions will arrive after the upgrade is complete. We apologize for the inconvenience.”

At that time, some users aware of CEO Zhao Jun was arrested by Chinese police. In this regard, co-founder Alfred Xu decided to step in to quell the “rumors” and prevent users from being harmed by “false information”. He wrote in the agreement’s Chinese Telegram channel: “At present, all team members are safe and sound; the main business is proceeding normally.”



Despite the assurances, concerns turned to full-blown panic on May 25 when local news outlet PANewsLab reported that the CEO could not be reached.This time, co-founder DJ Qian stepped in and ensure “User assets and employees are safe.” However, Qian also confirmed Zhao Jun’s disappearance.For the next month, Multichain continues to promote Its cross-chain protocol.

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Fast-forward to July 7, and users began noticing unauthorized withdrawals from Multichain’s Fantom Ethereum bridge and over $100 million in funds from other sidechains. Around $65 million in Tether (USDT) and USD Coin (USDC) was frozen by issuers Tether and Circle after the transaction led to widespread fears that Multichain had been hacked.Some security experts started Suspect The hack could have been the work of an insider.

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“Hacker” transfers USDC assets of multi-chain users (Chainaanalysis)

According to multichain:

“The user assets locked on the MPC address were abnormally transferred to an unknown address. The login information of the Kunming IP address was found on the cloud server platform, as well as a series of operations to transfer funds from the MPC address.”

The developer wrote that on July 9, Zhao Jun’s sister transferred the remaining assets in the router pool to a wallet address she controlled as an “asset preservation operation.” Four days later, Zhao Jun’s sister was reportedly arrested by the police (again, it is not clear why she was arrested). Since Zhao Jun and his sister are the only ones with access to operating funds, user assets, multi-chain servers, and even its website (which its own team is trying to shut down) “since inception,” the project’s own development team can no longer works.

“Later, the task force got in touch with Zhaojun’s family and learned that all of Zhaojun’s computers, mobile phones, hardware wallets, and mnemonic words had been confiscated by the authorities.”

Unfortunately for Multichain users, the worst may be yet to come…

To this day, we don’t actually know why Zhao Jun was arrested, what he was charged with, or any details about his case (and no, I don’t think Multichain will tell us either). However, funds seized as part of a criminal investigation may be considered proceeds of crime under Chinese law, opening the way for possible seizure by the state. In this case, it would be an absolute tragedy, unlike Multichain’s decision to leave all of its keys and access in the hands of one (or two) people.

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Binance’s Unusual Anniversary Gift for Employees: Unemployment

On the sixth anniversary of the cryptocurrency exchange, Binance decided to celebrate the occasion by gifting some of its employees. However, most recipients wish they had never opened it.

On July 14, Binance CEO Changpeng Zhao (CZ) launched a six-year commemorative event, statement, “We will always do what we think is in the best interests of users. We will continue to cooperate with regulators. We will also defend what we think is right” to ensure the road ahead. On the same day, the Wall Street Journal (WSJ) reported that the exchange had cut 1,000 jobs in recent weeks, bringing its total headcount to 8,000 before layoffs.

According to employees, the job cuts are mainly concentrated in the global and customer service departments, which may reduce the total number of employees by a third due to the ongoing restructuring. The Wall Street Journal called the ongoing DOJ investigation the “most enduring” challenge facing the exchange.

In this regard, CZ wrote:

“As we keep trying to increase talent density, involuntary layoffs occur. It happens at every company. The numbers reported in the media vary wildly. 4 FUD.”

The blockchain executive said that despite the layoffs, Binance is “still hiring.”Currently, on its website, the exchange the list At the time of publication, there are 96 positions to choose from.

On July 17, the Wall Street Journal published a follow-up report claiming that the exchange had stopped reimbursement for employees for items such as mobile phones, fitness and working from home, citing “the current market environment and regulatory environment” and the need to cut expenses.Binance is currently filing lawsuits with the SEC and the CFTC alleging it offered unregistered securities and operated an unregistered exchange in the U.S.

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Zhiyuan Sun

Zhiyuan Sun is a reporter for Cointelegraph, focusing on technology-related news. He has years of experience writing for major financial publications including The Motley Fool, Nasdaq.com, and Seeking Alpha.

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