The Multichain Ecosystem, a decentralized platform that allows users to access multiple blockchains with a single account, has been shaken by a series of incidents that compromised the security and integrity of its services.
According to the information obtained, Multichain CEO Zhao Jun was arrested by Chinese authorities on May 21, 2023, and his equipment and assets were confiscated. The reason for his detention is unclear, but some believe it may be related to the pressure on cryptocurrency activities in China.
On July 7, Multichain users noticed that their funds stored in MPC addresses (unique identifiers for Multichain accounts) were being transferred to unknown addresses without their consent. The total amount of unauthorized transfers is estimated to be over $100 million.
On July 13, Zhaojun’s sister claimed access to some of the remaining user funds and attempted to transfer them to an address she controlled. However, he was arrested by police shortly afterwards.
The Multichain team announced the cessation of operations on July 14 and advised the community not to use Multichain services anymore.
Whales panic sell altcoins after multi-chain news
News of the Multichain scandal caused panic among some users and investors, especially owners of FTM, the native token of Fantom, one of the blockchains powered by Multichain.
A whale with a large FTM reserve has reportedly sold all of its 16 million FTM tokens ($4.8 million) on Binance to cut losses.
According to blockchain explorer Etherscan, whales bought 3.8 million USDC ($3.8 million) of another stablecoin from Binance and traded it for 16 million FTM tokens in the past seven days. The average purchase price of whales was $0.24 per FTM token.
Whale made a profit of approximately $985,000 by selling FTM tokens at a price of around $0.3 per token.
