The Multichain saga has taken a surprising new turn. After over 100 days of inactivity, service unexpectedly resumed this week. Yet, it appears that insiders might be capitalizing on this, while the AWOL team shows no intention of restoring the service.
According to Multichain Explorer, new transactions began coursing through the network over 24 hours ago. Soon after the bridge came back online, a user quickly arbitraged Multichain tokens to secure a $1.6 million profit.
He withdrew 1.2 million FTM valued at $300k from Binance on the Fantom Network and exchanged them for Multichain’s WBTC, ETH, and USDT, which were trading at a significant discount. Then he transferred these assets to their native chains, using the bridge.
The timing of this action is suspicious and might mean that the user who made money from these trades was working together with the person who turned the bridge back on. Moreover, an X (formerly Twitter) user noticed that the first transaction made after the bridge resumed was from the Multichain deployer.
As of this writing, the bridge continues to register transactions, having processed 239 transactions for around 74 users since the restart. However, users report that bridging from Fantom is currently unavailable. Notably, this is where most of the Multichain liquidity is located.
Since we last reported, things are still uncertain regarding Multichain and its founder, Zhaojun He. While there is speculation that the project's CEO is still in custody, some of his team are planning to start up their own bridge, ValueRouter. This news was shared via the official Multichain X account, although it appears it was not agreed upon by all team members.
The splinter group now controls Multichain's X account and is posting random tweets promoting their new bridge. Meanwhile, Multichain's original frontend is still live, with users who are unaware of the issues still attempting to use the bridge and ending up losing money.
Compounding this issue is the fact that many of Multichain’s team members maintained a low profile, with minimal digital footprints, making it exceedingly difficult to locate them. Moreover, they are all in China, and getting any info from there is pretty much a dead end.
Unfortunately, once the largest and most used bridge in crypto, Multichain has turned into a complete mess. Its founders completely neglected the importance of decentralization and also compromised on security measures, leading to the current situation.