The Collapse of Multichain - What Happened and What's Next

The Chinese cross-chain protocol Multichain customers suffered a $1.5 billion after exploit about 4 months ago. The CEO and core team were arrested, and the funds may have been seized by Chinese authorities as part of an anti-money laundering operation.

Multichain's servers and private keys were controlled solely by the CEO, leading to the protocol's shutdown. Attempts to rescue assets led to more arrests.

Victims have banded together seeking answers and recovering their funds. Lawyers have been hired to assist. Over $65 million in assets have been frozen by stablecoin issuers.

The Chinese government has provided no information on the status of funds or recovery process, outraging investors.

At the time of withdrawal, the MULTI (project token) was worth about $4. Now, 4 months later, its price is $2.25.

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coinmarketcap screenshot of MULTI

For a dead project whose team has been arrested and website shut down, this is surprisingly slow. It is quite obvious that the price will continue to fall, it looks like an opportunity to short. However, be more careful with leverage.

I came across this story when I was studying the situation in the cross-chain exchange market. It is sad to see that the crypto industry, which originated around the idea of "trust only the code", still relies on centralized organizations for cross-chain exchanges.

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