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INTRODUCTION

Multichain, a prominent crypto bridging protocol, has announced the suspension of its operations after its CEO, Zhaojun, and his sister were detained by Chinese authorities. 

This unfortunate turn of events has left Multichain without access to essential information and operational funds. 

In a recent Twitter thread, the protocol cited these reasons for its forced cessation, marking a significant setback for one of the largest bridging protocols in the crypto world.

MULTICHAIN’S DISMAL SITUATION

The abrupt halt in Multichain’s operations comes in the wake of the detention of its CEO, Zhaojun, and his sister. 

The duo faced allegations of involvement in moving $220 million in funds, resulting in their arrest by Chinese police. 

Multichain, a highly regarded player in the crypto industry, found itself in a precarious position when it lost contact with the founder’s sister, prompting the protocol to take drastic measures.

THE TWITTER ANNOUNCEMENT

On Friday, July 14, 2023, Multichain took to its Twitter page to announce the suspension of its operations. 

Citing a lack of alternative sources of information and corresponding operational funds, the protocol expressed its inability to continue functioning under the circumstances. 

This unexpected turn of events has sent shockwaves through the crypto community, raising concerns about the implications for the bridging protocol’s users and the broader industry.

EXPLOITATION AND LOSSES

The vulnerability of Multichain’s existence was laid bare when it suffered an attack resulting in a staggering loss of $130 million. 

An unidentified attacker drained funds from numerous token bridges, exposing the protocol’s weaknesses. 

Shedding light on the incident, Multichain revealed that Zhaojun’s sister had found login information from an IP address in Kunming on the cloud server platform. 

The series of operations transferring funds from the MPC addresses further pointed to potential foul play.

IMPLICATIONS FOR MULTICHAIN AND THE CRYPTO INDUSTRY

Multichain’s suspension has raised questions about the protocol’s ability to safeguard user assets and maintain the trust of the crypto community. 

With its operations on hold, users are left in a state of uncertainty, as they may face difficulties accessing their funds or executing transactions. 

This development serves as a reminder of the need for robust security measures and rigorous audits within the crypto space, especially for bridging protocols like Multichain that play a vital role in facilitating interoperability between different blockchain networks.

CONCLUSION

The detention of Multichain’s CEO and his sister by Chinese police has dealt a severe blow to the protocol, ultimately leading to its decision to cease operations. 

The loss of access to critical information and operational funds has left Multichain with no choice but to halt its services. 

The incident also highlights the risks associated with the crypto industry and the importance of thorough security practices. 

As the crypto community awaits further developments, the fate of Multichain and its users hangs in the balance, raising concerns about the broader implications for the future of bridging protocols.

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