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The Multichain ecosystem, a decentralized platform that allows users to access multiple blockchains with a single account, has been shaken by a series of events that compromised the security and integrity of its service.
According to the information obtained, Multichain CEO Zhaojun was arrested by the Chinese authorities on May 21, 2023, and his devices and assets were confiscated. The reason for his detention is unclear, but some think it may be related to pressures on cryptocurrency activities in China.
On July 7, Multichain users noticed that their funds stored in MPC addresses, which are unique identifiers for Multichain accounts, were 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, who claimed to have access to some of the remaining user funds, tried to move them to addresses under her control. However, he was arrested by the police soon after.
The Multichain team announced on July 14 that they had to cease operations and advised the community not to use the Multichain service anymore.
Whale Panic Selling Altcoins After Multichain News
The news of the Multichain scandal caused panic among some of its users and investors, in particular the owners of FTM, the native token of Fantom, one of the blockchains powered by Multichain.
A whale with a large FTM stash has reportedly sold all of its 16 million FTM tokens ($4.8 million) on Binance in an attempt to reduce its losses.
According to data from a blockchain explorer, Etherscan, the whale bought another stablecoin, 3.8 million USDC ($3.8 million), from Binance and traded it for 16 million FTM tokens in the past seven days. The average purchase price of the whale was $0.24 per FTM token.
Whale made a profit of approximately $985,000 by selling FTM tokens at around $0.3 per token.
*Not investment advice.