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Multichain, the blockchain technology company, has farm operations after a tumultuous series of events beginning with the arrest of its CEO, Zhaojun, on May 21, 2023. The incident resulted in operational difficulties due to the seizure of Zhaojun’s personal devices, containing access keys to the server and financial assets of Multichain.
Over the past two days, the Multichain protocol has encountered multiple issues due to unforeseeable circumstances. The team has done everything possible to keep the protocol running, but we are currently unable to contact CEO Zhaojun and obtain the server access needed to…
— Multichain (formerly Anyswap) (@MultichainOrg) May 31, 2023
In a long tweet, Multichain explained in detail why the company was closing:
“Due to the lack of alternative sources of information and corresponding operational funds, the team is forced to cease its activities.”
Upon his arrest, Multichain was unable to contact the CEO, and all MPC node servers were under Zhaojun’s personal cloud account, leaving the team unable to maintain normal operations. All funds and investments held by Zhaojun are currently inaccessible.
The team used remaining access to non-MPC servers and remained transparent with their community, letting them know about ongoing issues. Zhaojun’s family, after gaining access to his personal computer, granted engineers from the MultiChain team limited access to troubleshoot some technical issues. However, this was not enough to keep operations afloat:
“All of Zhaojun’s computers, phones, hardware wallets and mnemonic phrases have been confiscated by the authorities (…) This also means that all team funds and access to servers are in the hands of Zhaojun and the police.”
On July 7, it was discovered that assets linked to MPC addresses had been transferred to unknown addresses. Transactions tracing back to an IP address in Kunming were discovered on the cloud server platform as the team attempted to continue operations as normal. The team asked their community to stay away from transition services because of this unknown behavior.
The Multichain service is currently stopped and all bridge transactions will be blocked on source chains.
There is no confirmed pick up time.
Please do not use multi-chain bridging service now.
— Multichain (formerly Anyswap) (@MultichainOrg) July 7, 2023
Then, Zhaojun’s sister transferred the remaining user assets in the router pool to addresses under her control on July 9, presumably to protect them. Unfortunately, she was also taken into police custody on July 13, leaving the status of the assets she controlled unclear.
In light of the above events and due to a lack of funds and key operational information, MultiChain has announced a halt to all operations on July 13. The team enlisted GoDaddy’s help in deleting the company’s domain.