Multichain Halts Operations, Warning Users of Mysterious $126M Outflow

A startling $126 million asset outflow from cross-chain platform Multichain prompts an immediate halt to services, and an advisory warning issued to users.

Multichain, a cross-chain bridge platform, has unexpectedly suspended its services and cautioned its user base against transacting after a staggering $126 million asset outflow. This exodus, initially reported by security firm PeckShield, involved cryptocurrency assets being transferred to unidentified wallets predominantly from Multichain’s bridge deployments on Fantom and Dogechain:

The firm’s Twitter statement read, “The Multichain service has currently stopped, and all bridge transactions will remain stuck on the source chains. There is no confirmed resumption time.”

Multichain manages over $1.2 billion in assets across various networks, holding a market cap of almost $51 million.

An on-chain analyst and former researcher at Huobi Ventures, Loki Zeng, suggested that the nature of the transfers raises questions. The characteristics of the transfers could be suggests either an attacker gaining access to Multichain’s multi-party computation wallet’s private key shards or the involvement of a white hat hacker. However, these remain conjectures as the actual cause remains unknown.

As concerns continue to mount within the crypto community, Fantom Foundation issued a clarification aimed at reassuring holders of its tokens. The tweet stated, “For the avoidance of doubt, FTM was never issued or managed by Multichain, so wFTM, FTM ERC-20, and FTM on Opera are not affected.”

This incident marks another blow to Multichain, following the company’s turbulent 2023. In May, users reported unusual delays in cross-chain funds when rumors of the Multichain CEO being arrested in China spread around social media: