Multichain Confirms CEO’s Arrest by Chinese Officials, Announces Winding Down Operations

Recently hacked multichain router protocol Multichain has announced it will shut down operations, citing a lack of funds and operational information about its CEO Zhaojun, who is in Chinese police custody. The latest update provided by the team confirmed the reported arrest of the CEO.

On July 14, Multichain took to Twitter to reveal that Zhaojun had lost contact with the team since he was picked up from his home by Chinese police. His sister was also arrested.

Multichain is closing

When contacting the MPC node operators, the team was informed that the operational access keys for the MPC node servers had been revoked. They explained that the servers of the MPC nodes in question were running under the CEO’s personal cloud server account and that he had sole access to it.

The team also learned that the authorities had confiscated all of Zhaojun’s computers, phones, hardware wallets, and phrases.

“Since the beginning of the project, all operating funds and investments from investors have been under Zhaojun’s control. It also means that all of the team’s funds and access to the servers are with Zhaojun and the police.”

The Multichain team said they refrained from disclosing unauthorized information about the case to the public as suggested by the lawyers.

The daily operations were carried out with the help of existing access to the servers that had not been canceled, as well as with the help of Zhaojun’s sister, who reportedly moved the remaining user assets in the router cluster and later reported this asset to the team and several project parties.

With contact with Zhaojun’s sister also cut off, the Multichain team said the status of the holding assets remains uncertain.

$130 million in exploitation and subsequent dismantling

Multichain – formerly Anyswap – suffered an $8 million exploit in 2021.

But the problems first surfaced in late May this year, which included rumors about the arrest of the protocol management team in Shanghai after the disappearance of the CEO. This later escalated after a $130 million exploit earlier this week.