Multichain Halts All Services Following Exploit, Losses Over $126 Million

by Nik Asti

Published: July 07, 2023 at 3:30 pm Updated: July 07, 2023 at 3:03 am

by Karolina Gaszcz

Edited and fact-checked: July 07, 2023 at 3:30 pm

In Brief

Multichain’s services have been discontinued due to an exploit leading to over $126 million in losses, highlighting the risks associated with DeFi protocols and the need for increased security measures.

In a shocking development, the cross-chain router protocol, Multichain, suffered an exploit, leading to losses surpassing $126 million.

Multichain Halts All Services Following Exploit, Losses Over $126 Million

The hack was executed via a withdrawal of over $102 million in cryptocurrencies from Multichain’s Fantom bridge contract on the Ethereum network. This significant sum includes $31 million in Wrapped Bitcoin (WBTC), $13.6 million in Wrapped Ether (WETH), and $58 million in USDC. At this moment, the perpetrator’s wallet address boasts more than $126 million.

The incident unfolded with the first dubious transaction recorded at 4:21 pm UTC, involving a mere $2 in USDC extracted from the Multichain Fantom bridge. The malefactor escalated the attack within hours, draining an astonishing $31 million in WBTC. The Multichain Moonriver bridge and the Multichain Dogechain bridge subsequently faced asset depletion.

.@MultichainOrg suffers another hack today, $126M stolen (9% TVL) and $MULTI price dropped 20%. Previous hack occurred in Jul 2021, resulting in $7.9M loss due to compromised private key.

The impact extends to #FTM, #Moonriver, #Kava, #Dogechain, #Conflux, and #ETHW ecosystems.… pic.twitter.com/JBkA693vii
— 0xScope (🪬 . 🪬) (@ScopeProtocol) July 7, 2023

While the precise nature of the exploit remains a mystery, some users speculate it may have been a rugpull event. The project admitted that assets on the MPC bridge were moved to an unknown address but expressed uncertainty about the incident’s context.

As previously reported by Coincu, the project advised users to discontinue using the service and revoke approvals. However, the latest announcement reveals that Multichain has put a stop to all on-chain services with no confirmed timeline for resumption.

Multichain Hack

In recent weeks, Multichain had been wrestling with undisclosed technical issues. On May 31, the team revealed their CEO’s unexpected disappearance. This event led to numerous issues and transaction delays. These problems grew so severe that Binance temporarily suspended some Multichain derivative token withdrawals on July 5.

The Multichain service stopped currently, and all bridge transactions will be stuck on the source chains.

There is no confirmed resume time.

Please don’t use the Multichain bridging service now.
— Multichain (Previously Anyswap) (@MultichainOrg) July 7, 2023

This exploit underlines the risks inherent to decentralized finance protocols. It underscores the need for stringent security protocols. Users have received advice to stop using the service. They should also revoke approvals. The protocol has halted all on-chain services in an extraordinary move. This action leaves Multichain’s future uncertain. The incident is expected to stimulate discussions on robust security measures. These discussions are crucial in the ever-evolving DeFi sector.

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About The Author

Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

Nik Asti