Multichain Shuts Down Operations After CEO Arrested in China

Sahana Kiran
Source – Unsplash

Multichain, a prominent cross-chain routing protocol, has recently garnered attention for all the wrong reasons. Within the cryptocurrency community, there have been speculations surrounding hacking incidents and suspicions of fraudulent activities associated with the network. However, a recent turn of events has shocked the industry. The company made an abrupt announcement on Twitter, stating that it is suspending its operations.

In a recent Twitter thread, the firm revealed that it was pushed to suspend operations because of the “lack of alternative sources of information and corresponding operational funds.” Multichain directed the attention to its CEO Zhaojun.

According to the Twitter thread, CEO Zhaojun was apprehended by Chinese authorities on May 21. His computers, phones, hardware wallets, and mnemonic phrases were seized. The tweet further read,

“Since the inception of the project, all operational funds and investments from investors have been under Zhaojun’s control. This also means that all the team’s funds and access to the servers are with Zhaojun and the police.”

The team further explained that Zhaojun’s sister informed them about an asset preservation measure and proceeded to transfer some funds to addresses under her control. However, the Multichain CEO’s family subsequently informed the team that Zhaojun’s sister had also been detained by the police and is currently unreachable.

Also Read: Multichain’s $122 Million ‘Outflow’ Sparks Debate: Hack or Rug Pull?

Multichain crumbles amidst arrest of execs

The situation took a turn for the worse as the company faced the arrest of both the CEO and his sister. With no viable options available, the team had to make the difficult decision to cease their operations. Elaborating on the way forward, they further stated,

“The Multichain team does not have the access to Domain Account to redirect or bring down the frontend Please help amplify and ask users not to use the Multichain service anymore. Can @GoDaddy help to bring down”

While the entire market was enjoying an uptrend, the price of Multichain’s native token MULTI dipped. The asset, at press time, was trading for a low of $1.96 with a 15.16% daily drop.

Also Read: Solana, Cardano, MATIC Rally Upto 50% Post XRP Ruling