Multichain team pivots after security debacle
Despite a $130 million exploit, Multichain’s team has launched a new project based on the same concept as the previous one
CryptoFX/Shutterstock, modified by Blockworks
Remember Multichain, the bridging network that suffered unauthorized withdrawals of over $130 million, allegedly involving its CEO?
It suspended operations in July after disclosing that CEO Zhaojun and his sister were behind transferring a large amount of tokens from its bridging networks to externally owned addresses.
Now, some of the platform’s developers are getting back in the game with a new project, ValueRouter, that looks quite a bit like Multichain.
And it’s safe to say people don’t like it.
Multichain, previously known as Anyswap, enabled users to bridge their cryptoassets across different blockchain networks.
ValueRouter looks similar, as its website explains: “Swap any asset for your desired asset across multiple chains in just one transaction.”
The new venture, announced Friday, seems to enable users to transfer or exchange assets between Ethereum, Avalanche, Optimism and Arbitrum blockchains.
“ValueRouter is a unified protocol that simplifies multi-chain asset swaps by integrating Circle CCTP and DEXes, empowering developers to build cross-chain dApps and enabling users to effortlessly route assets to any major DeFi platform,” the team said.
It utilizes a multi-party computation system, similar to a multi-signature wallet, which is much like how Multichain operated.
A Multichain representative told Blockworks that the team members behind the new project are “self-employed engineers who have also fallen victim to Multichain’s debacle.”
The representative added that there have been discussions about potential grants for the team from angels and other established players.
But the news sparked surprise among some, with crypto sleuth ZachXBT suggesting the team should address the $125 million that’s unaccounted for before embarking on a new project.
Nick SR, who manages social media for the Fantom Foundation, remarked, “Too soon.”
In July, Multichain urged users to halt bridge activities due to unauthorized withdrawals.
The Fantom ecosystem was hit particularly hard by Multichain’s failure; its already suffering total value locked (TVL) cratered following the unauthorized withdrawals, which ultimately forced the Fantom-based SpiritSwap DEX to shut down.
Fantom TVL; Source: DeFiLlamaMultichain later revealed that its CEO Zhaojun had been detained by Chinese authorities since late May, and his devices and recovery phrases were confiscated.
Zhaojun’s family allegedly gained access to the cloud server platform using information from his home computer, and granted only limited access to the team just to address some tech issues.
A Multichain team member earlier told Blockworks that tokens affected by the large withdrawals lacked collateral, leaving users without a quick solution. They added that Zhaojun couldn’t perform the withdrawals independently as the police controlled the server access.
As of last month, the team had no plans to reimburse users for the unauthorized withdrawals.
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