According to Cointelegraph, SpiritSwap, a decentralized exchange (DEX) based on smart contract platform Fantom, will cease operations on September 1 due to its exposure to issues with the Chinese cross-chain protocol Multichain. On August 9, the developers announced via Discord that Multichain’s hack resulted in SpiritSwap’s entire finances drying up, making it impossible to maintain operating costs, pay wages, and market. The team stated that it is looking for a team to "take over" DEX. If no team takes over by September 1, DEX will completely cease operations.
SpiritSwap was founded in 2021 and has been one of the popular DEXs on Fantom before the cryptocurrency bear market hit. Its total value locked (TVL) reached an all-time high of $374 million in January 2022, but fell further after the Multichain incident and stood at $2.92 million at press time.
After months of speculation, Multichain developers revealed that co-founder and CEO Zhanojung He was arrested by Chinese police in May on unknown charges. While in custody, he allegedly had access to all of Multichain's private keys and servers. Although there is scant information about his detention, funds from Multichain and its users have been exchanged for stablecoins and private coins and transferred out of the protocol. Some victims subsequently accused Chinese police of being involved in complex embezzlement schemes involving user funds.
