Multichain has recently encountered a significant operational crisis following the disappearance of its CEO, Zhaojun. The company has faced challenges due to the loss of access to its servers and funds, leaving the team with limited resources to sustain operations.
Key Takeaways
- The CEO of Multichain, Mr. Zhaojun, was apprehended by Chinese law enforcement on May 21, 2023, while in possession of access keys to the majority of the network’s servers.
- All computers, mobile phones, hardware wallets, and seed phrases were confiscated by the Government.
- The team is now limited to operating with the remaining servers. As per the instructions, they are unable to disclose any information regarding the incident.
- On June 4, Mr. Zhaojun’s family successfully logged into the server using the browsing history on his computer. However, the team is only permitted physical access to the family computer for resolving technical issues.
- During this period, the team was informed that Mr. Zhaojun would be released soon and was requested to continue maintaining the network’s connections.
- On July 7, user assets on the platform were abnormally transferred to an unknown address, totaling approximately $126 million.
- On July 9, Mr. Zhaojun’s sister transferred the remaining user assets to the pool to safeguard them.
- On July 13, the police arrested Mr. Zhaojun’s sister. Currently, there is no access to her or the status of the assets she transferred (nearly $100 million).
- Due to the lack of information sources and operational costs, the team was forced to cease operations.
Confirming the rumors, the CEO of Multichain was indeed apprehended by Chinese law enforcement. Subsequently, an abnormal loss of funds occurred on the Multichain platform, prompting Mr. Zhaojun’s sister to transfer the remaining amount to the pool to preserve the assets. Eventually, she was also arrested by the Government. The reasons behind these arrests have not been disclosed yet.
Challenges Faced by Multichain
On May 21, 2023, Zhaojun, the CEO of Multichain, was taken away by Chinese authorities, and since then, he has remained out of contact with the global Multichain team. The team discovered that their access to the MPC node servers had been revoked, and it was revealed that these servers were running under Zhaojun’s personal cloud server account. Furthermore, all of Zhaojun’s computers, phones, hardware wallets, and mnemonic phrases were confiscated by the authorities, leaving the team without access to critical resources.
Efforts to Maintain Operations
Despite the lack of information regarding the case, the Multichain team has been striving to sustain project operations with the limited access available on non-MPC servers that have not been revoked. The team has cooperated with the demands of Zhaojun’s family and adhered to local laws and regulations, refraining from disclosing unauthorized information about the case to the public. The Multichain protocol has continued to operate as designed, and the team has made efforts to resolve user issues within their capabilities.
On July 7, user assets locked on the MPC addresses were unexpectedly transferred to unknown addresses. The team discovered login information from an IP address in Kunming on the cloud server platform, along with a series of operations transferring funds from the MPC addresses. On July 9, Zhaojun’s sister, who had been preserving the remaining user assets, was taken into custody by the police, leaving the status of the preserved assets uncertain.
Operational Cease and Community Notification
Due to the lack of alternative sources of information and operational funds, the Multichain team has made the difficult decision to cease operations. They have informed the community about the circumstances and pledged to update them in case of any further developments. Additionally, the team has requested assistance from domain service provider GoDaddy to bring down the front end of the Multichain website, as they do not have access to the Domain Account.
Read more: Multichain Bridge Loses $130M in Crypto Funds, $MULTI Continues Downward
Multichain (MULT) Price Sees Nearly 8% Decline Following Recent News
The price of Multichain’s native token (MULT) has dropped by almost 8% following recent news at the time of writing this article. The market reacted negatively to the CEO’s arrest and the unusual loss of funds on the Multichain platform. Concerns about security and stability led to a sell-off of MULT tokens. Rebuilding trust and providing transparent communication will be crucial for the platform’s recovery. The ongoing investigation and measures taken to restore faith will determine the future trajectory of the MULT token’s price.
Conclusion
Multichain’s operations have been severely impacted by the disappearance of its CEO and the subsequent loss of access to servers and funds. The team’s efforts to maintain project operations with limited resources have ultimately led to the decision to cease operations. The situation highlights the challenges faced by blockchain projects in the face of unforeseen circumstances and the need for transparent communication with the community.
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