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Multichain, the blockchain technology firm, has closed operations after a chaotic series of events that began with the arrest of its CEO, Zhaojun, on May 21, 2023. The incident led to operational difficulties due to the seizure of personal devices of Zhaojun, who has Multichain server access keys and financial assets.
In the past two days, the Multichain protocol has experienced many issues due to unforeseen circumstances. The team is doing everything possible to keep the protocol running, but we are currently unable to contact CEO Zhaojun and get the necessary server access for…
— Multichain (Formerly Anyswap) (@MultichainOrg) May 31, 2023
In a lengthy tweet, Multichain revealed the details of why the company is shutting down:
“Due to the lack of alternative sources of information and corresponding operational funds, the group was forced to stop operations.”
Upon 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 resume normal operations. All funds and investments held by Zhaojun, are currently inaccessible.
The team uses remaining access to non-MPC servers and remains transparent with their community, updating them about ongoing issues. Zhaojun’s family, after accessing his home computer, allowed MultiChain engineers limited access to solve some technical problems. However, this is not enough to maintain operations:
“All of Zhaojun’s computer, phone, hardware wallet, and mnemonic phrase were confiscated by the authorities. […] This also means that all team funds and access to servers are with Zhaojun and the police.
On July 7, assets tied to MPC addresses were found to have been transferred to unknown addresses. Transactions traced back to an IP in Kunming were discovered on the cloud server platform as the team tried to resume operations as normal. The team asks its community to stay away from bridging services due to unknown behavior.
The Multichain service has stopped now, and all bridge transactions will be stuck on the source chains.
There is no confirmed resume time.
Please do not use the Multichain 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, he was also detained by the police on July 13, leaving the status of the assets under his control unclear.
In light of the above events and due to the lack of funds and important operational information, MultiChain announced the cessation of all operations on July 13. The team asked GoDaddy for help in acquiring the company’s domain.
