The Multichain (MULTI) bridge protocol announced today that it has shuttered operations due to a lack of operational funds and information about its CEO Zhaojun, who is in the custody of Chinese police.
Problems afflicting Multichain’s cross-chain bridge began back in late spring after users flooded Multichain’s Telegram complaining that certain pending transfers were stuck.
At the time, there were rumors that Chinese authorities had arrested several Multichain executives, including CEO Zhaojun. The protocol later confirmed on Twitter that the CEO was missing and that he had sole access to the blighted servers responsible for the delays.
Today’s announcement confirmed Zhaojun’s arrest.
The Multichain team also wrote that police confiscated all of Zhaojun’s devices, crypto hardware wallets, and mnemonic phrases, essentially impounding all of the team’s funds and forcing them to shutter operations.
Zhaojun’s sister also arrested
On June 4, Zhaojun’s family accessed the cloud server using historical information on his home computer. They allowed Multichain team engineers physical access to the desktop to fix technical issues with two routers.
The following day, Multichain partially resumed operations.
A month later, using login information obtained on the cloud server from an IP address in Kunming, Zhaojun’s sister accessed customer assets that were locked on multi-party computation (MPC) wallets, transferred them into wallets under her control, and subsequently notified the team.
At the time, the transactions, which totaled at least $200 million in crypto, were thought to be the work of exploiters.
On July 13, Zhaojun’s family informed the team that the CEO’s sister was also taken into custody by Chinese police. She has now also dropped out of contact and the status of the secured assets is uncertain.
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