Ending weeks of speculation, Cross-chain project Multichain has confirmed that CEO Zhaojun is currently lodged in jail after being arrested by the Chinese authorities on May 21, 2023. In a Twitter thread, the team shed light on its current state of affairs, the founder’s possible release, and an important update on the user funds locked on the MPC addresses.
Things became much clearer after the team established contact with the MPC node operators, who informed them that these servers were running under Zhaojun’s cloud server account and that all of his computers, phones, hardware wallets, and mnemonic phrases were confiscated by the authorities. “This also means that all the team’s funds and access to the servers are with Zhaojun and the police.”
This was why the Multichain team released the news about Zhaojun’s disappearance and informed the community about the technical issues they currently faced. But on June 4, Multichain team engineers gained physical access to the home computer [as allowed by Zhaojun’s family] to fix technical issues with Router 2 and Router 5.
Multichain’s Jailed CEO Might Be Released Soon
Although the team was not informed about the details of the case, it was notified that Zhaojun would be released soon and was asked to continue maintaining the system and await further updates. But in a startling revelation, Zhaojun’s sister, who managed to transfer the remaining user assets in the router pool, has been taken into custody as well.
The status of the assets she has preserved remains uncertain for now. And due to the lack of alternative sources of information and corresponding operational funds, Multichain decided to cease operations.
Earlier reported by TronWeekly, over $127 million in assets were taken out unexpectedly and without authorization from the DeFi bridge. The team responded by shutting down the asset bridge and encouraging users to revoke any contract permissions.
As a number of keen-eyed on-chain sleuths began their investigations, the unusually anomalous outflows sparked fears of a hack and even generated accusations of rug-pulling. According to Chainalysis, a top blockchain analytics tool, it was one of the greatest cryptocurrency hacks ever.
In a study dated July 10, the data tracking platform stated that the large withdrawals might have been the result of an insider hack or rug pull rather than merely a function aberration or coding mistake. Fingers were pointed at the company’s CEO, who unexpectedly disappeared before news of his official arrest broke.