Was Multichain Exploit a Rug Pull?

Security experts Chainalysis have highlighted the possibility of a rug pull by the Multichain team. Meanwhile, there were outflows worth over $10.2 million on Tuesday.

Decentralized finance (DeFi) hacks and rug pulls have been draining millions in users’ funds. Recently, Multichain lost over $126 million to an exploit, but there has been discussion in the community over whether it could have been a rug pull.

Did Insiders Carry out Multichain Rug Pull?

The blockchain analysis firm Chainalysis has discussed some issues that led to suspicions of whether the Multichain exploit was an insider job.

Multichain’s Fantom bridge lost over $126 million to an exploit on July 7. The multi-party computation (MPC) system was compromised as the hackers gained access to the required threshold keys. 

Chainalysis highlighted that there has been turmoil around the project’s operation and core team recently.

In May, BeInCrypto reported that the Multichain CEO, Zhaojun, went missing, and there were rumors of his arrest in China. On top of that, the team maintained a silence on the whereabouts of Zhaojun. Hence, Binance suspended deposits of over 10 swap pairs on Multichain.

The team claimed it could not perform necessary maintenance because it lost contact with Zhaojun. Eventually, Binance also ceased support for eight Multichain bridge tokens. 

Due to various internal problems, there are speculations that the exploit could have been a rug pull.

Lastly, on Monday, another security firm, Lookonchain, reported that an address with the tag “Fake_Phishing183873” received 10.2 million USDT from Multichain.

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