In a significant development, Changpeng Zhao (CZ), the CEO of the leading crypto platform Binance, assured users that their funds were safe following a major incident involving cross-chain router protocol Multichain. This came in the wake of a series of unexplained outflows from Multichain’s bridge contracts, which sparked fears of a potential hack.
Highlighting Multchain’s announcement regarding the unusual transactions, Zhao tweeted:
Looks like another hack happened on Multichain. This DOES NOT affect users on @Binance or @Binance itself. We have swapped all assets out and closed deposits a while back. Regardless, we offer our assistance in helping with the situation.
— CZ 🔶 Binance (@cz_binance) July 7, 2023
Stay #SAFU. https://t.co/GGInbxFkic
Binance, one of the world’s leading cryptocurrency exchanges, recently announced the suspension of deposit and withdrawal support for a range of Multichain-bridged tokens. The decision, effective from July 7, 2023, impacted tokens such as Polkastarter (POLS), Alchemy Pay (ACH), SuperVerse (SUPER), Harvest Finance (FARM), Beefy Finance (BIFI), Alpaca Finance (ALPACA), Travala.com (AVA), and Spell Token (SPELL). These tokens were bridged on networks such as BNB Smart Chain, Fantom, Ethereum, and Avalanche.
This move followed an earlier suspension of deposits for various Multichain-bridged tokens on May 25, 2023, after days of stalled transactions that created uncertainty around the Multichain protocol. Binance stated that the suspension was a risk management measure aimed at safeguarding users’ funds. Despite the suspension, trading of the tokens on Binance remained unaffected, and users could still withdraw them through alternative networks.
The Multichain incident, which saw major outflows from its Fantom, Moonriver, and Dogecoin bridge contracts, led to significant concern in the crypto community. The unannounced transfers stripped Multichain’s Fantom bridge of nearly its entire holdings in WBTC, USDC, USDT, and several altcoins worth over $130 million.
On-chain data revealed that more than $102 million worth of crypto was withdrawn from Multichain’s Fantom bridge contract on Ethereum. This included $31 million in Wrapped Bitcoin (WBTC), $13.6 million in Wrapped Ether (WETH), and $58 million in USDC. The wallet address of the alleged exploiter held over $126 million at the time.
Blockchain security firms SlowMist and Certik suggested that the activity looked more like a hack or rug pull and less like a migration. SlowMist highlighted the first suspicious transaction, which took place at 4:21 pm UTC, where just $2 in USDC was withdrawn from the Multichain Fantom bridge.
In the midst of the turbulence, Multichain faced additional challenges, including allegations of the protocol’s co-founder and CEO, Zhao Jun, going missing and speculation of a potential police investigation. The Multichain team urged users to suspend all use of its services and revoke contract approvals until further notice.
