Multichain’s $130M exploit potentially an inside job: Chainalysis

Multichain’s recent troubles, including the disappearance of its CEO, suggest that the exploit may have been an inside job or a rug pull, according to Chainalysis


CryptoFX/Shutterstock, modified by Blockworks


Multichain, a platform that facilitates cross-chain transactions, suffered unauthorized withdrawals totaling $130 million last week, leading to the suspension of its services.

In response to the unusual outflows, the protocol advised users to revoke all contract approvals.

Describing the exploit as “one of the biggest crypto hacks on record,” Chainalysis said in a Monday report that the incident could be the result of an inside job.

Cross-chain bridge protocols like Multichain have become attractive targets for hackers due to their experimental nature and the significant amounts of assets they handle, it added.

Tokens such as wrapped ether, wrapped bitcoin (wBTC), USDC, DAI and LINK were among those affected by the suspected exploit.

It is suspected that the attacker gained control of Multichain’s multi-party computation (MPC) keys, which are responsible for executing transactions. Notably, the attacker did not swap out centrally controlled assets like USDC, which can be frozen, according to the report.

Indeed, after the attack, Circle and Tether froze specific addresses containing over $65 million in assets transferred from Multichain.

Subsequently, on-chain activity on Monday revealed that the Multichain executor address was depleting various anyToken addresses across multiple chains and transferring the assets to a new externally owned address.

Multichain hasn’t responded to multiple requests for comment. The most recent update was on July 7, stating that there was no confirmed timeline for the resumption of its services.

Loading Tweet..

Prior to the exploit, Multichain had been facing other trouble, plagued by technical issues and stuck transactions.

Multichain’s CEO Zhaojun has allegedly been missing for over a month, and other team members are believed to have been detained by Chinese authorities.

The protocol has previously indicated that the CEO is the only person with the right permissions for server maintenance.

Chainalysis noted rumors of the CEO’s arrest and the confiscation of $1.5 billion from the protocol’s smart contract funds, resulting in the suspension of services for multiple chains.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Frax report cover.jpg


Frax saw continued development in its frxETH liquid staking derivative and Fraxlend money market throughout 2023. Frax V3 introduces an RWA strategy to drive utility to the protocol's cornerstone product, the FRAX stablecoin.


Cross-chain protocol’s product development-focused unit Wormhole Labs formally launches following $225 million raise


Accredited and non-accredited investors worldwide will be able to purchase the Note starting Dec. 6 on US-regulated trading platform INX


Bitcoin’s next halving is less than five months away. History says they’re bullish but will this time be different?


Merger is set to allow the combined business to “flex between our different lines of business,” Hut 8 CEO says


Agency’s decision to start comment window earlier than expected could be bullish for spot bitcoin ETF approval in January, industry watchers say


Jump Crypto is the trading firm at the center of Terra-related market manipulation allegations