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Multichain, a cross-chain bridge platform, unexpectedly suspended its services and warned its user base against trading after a staggering $126 million asset outflow. This exodus, initially reported by security firm PeckShield, involved the transfer of cryptocurrency assets to unidentified wallets, primarily from Multichain bridge deployments on Fantom and Dogechain:
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
The company’s Twitter statement read, “The Multichain service is currently down and all bridge transactions will remain blocked on source chains. There is no confirmed pick up time.
Multichain manages over $1.2 billion in assets across various networks, holding a market capitalization of nearly $51 million.
On-chain analyst and former researcher at Huobi Ventures, Loki Zeng, suggested the nature of the transfers raises questions. THE features transfers could be suggested either by an attacker gaining access to the private key shards of Multichain’s multiparty compute wallet or by the involvement of a hacker. However, this remains conjecture as the actual cause remains unknown.
— PeckShield Inc. (@peckshield) July 6, 2023
As concerns continue to mount within the crypto community, Fantom Foundation has released a clarification aimed at reassuring holders of its tokens. The tweet declared“For the avoidance of doubt, FTM was never issued or managed by Multichain, so wFTM, FTM ERC-20 and FTM on Opera are unaffected.”
This incident marks another blow to Multichain, following the company’s turmoil in 2023. In May, users reported unusual delays in cross-chain funds when rumors that the CEO of Multichain would be stopped in China broadcast on social networks:
BitKeep has now suspended MutiChain cross-chain support to protect the safety of our users.
💜 Kind reminder: BitKeep’s cross-chain bridge function is not affected by this incident. Please feel free to continue using it.
— BitKeep Wallet (@BitKeepOS) May 24, 2023