On an unforeseen day in May 2023, the cryptocurrency world was taken aback when Zhaojun, CEO of the blockchain-based platform Multichain, was apprehended by Chinese authorities. The arrest, which took place right at Zhaojun’s residence, severed the CEO’s contact with the Multichain global team and initiated a series of unfortunate events that placed the highly regarded project in jeopardy.
Access Revoked: The Team Left in Limbo
As the team grappled with this startling incident, they were hit with another alarm – their access keys to the MPC node servers were promptly revoked. Bizarrely, these servers had been operating under Zhaojun’s personal cloud server account, leaving the team unable to break into these crucial nodes since nobody else had access.
Seizure of Assets Further Deepens the Crisis
Worst was yet to come. All of Zhaojun’s property, including computers, smartphones, hardware wallets, and mnemonic phrases, have been confiscated by the authorities. Zhaojun had sole control over operational funds and investor investments, rendering the team powerless, as all the assets transitioned into police custody.
The Multichain Team’s Uphill Battle
Despite limited access and resources, the dedicated team continued to operate the project on non-MPC servers that hadn’t been scrapped yet. Coordinating with Zhaojun’s family and adhering to legal advice, the team took a stand to cooperatively fulfil family requests and comply with local laws.
Multichain Robbed: User Assets Transferred to Unknown Addresses
On July 7, further complications arose when user assets from MPC addresses were bizarrely transferred to unknown addresses. Zhaojun’s family discovered an IP log from an address in Kunming on the cloud server platform, accompanying a slew of operations transferring funds.
Desperate Measures to Preserve Assets
In a bid to safeguard the remaining assets, Zhaojun’s sister relocated them to EOA addresses she controlled. However, in another unfavourable twist, she too was taken into custody, leaving the status of these assets in uncertainty.
Multichain Halts Operations Amidst Unprecedented Chaos
Faced with a devastating lack of information and funds, Multichain has decided to cease operations for the time being. While the team has vowed to keep the community updated, they urge GoDaddy to deactivate the frontend of the now defunct Multichain service.
The unfortunate series of events that unfolded within Multichain, therefore, serves as a sobering reminder of the criticality of a robust operational and security framework in the digital asset ecosystem.