Multichain cross-chain protocol hacked for $120 million

What’s new? On July 6, members of the crypto community recorded an abnormal outflow of funds from the Multichain cross-chain protocol. The attack affected Fantom, Moonriver, and Dogechain bridges, and the total amount of damage amounted to about $108 million. The project’s team said it could not explain the movement of funds and was investigating, and urged users to withdraw all contracts related to Multichain. The developers later suspended the service indefinitely.

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

More details about the situation. A total of about $102 million in cryptocurrencies, including $7214 WETH ($13,6 million), 1024 WBTC ($31 million), and USDC worth $58 million, were withdrawn from Ethereum’s smart contract of the Fantom bridge. USDC and USDT worth $5,87 million were withdrawn from the Moonriver bridge’s contracts to Ethereum, leaving the project with about $700 000.

In addition, $666 000 was withdrawn from Ethereum’s contract of the Dogechain bridge, representing more than 86% of the total deposits. As a result, the project’s reserves are almost depleted.

dogechain multichain drained pic.twitter.com/FqZ0OHDNXc— Spreek (@spreekaway) July 6, 2023

Multichain is a multi-party computation (MPC) bridging network. The developers claim that the cryptographic keys controlling the protocol are divided into many parts and distributed throughout the network. In theory, this should prevent the possibility of unauthorized withdrawals by one person or group.

Multichain has been experiencing technical problems over the past few weeks. On May 31, the team announced that the CEO, who had sole control over some of the protocol’s router servers, was missing. The team’s lack of access to them led to transaction delays. On July 5, crypto exchange Binance suspended the withdrawal of some of Multichain’s derivative tokens.

In the past two days, the Multichain protocol has experienced multiple issues due to unforeseeable circumstances. The team has done everything possible to maintain the protocol running, but we are currently unable to contact CEO Zhaojun and obtain the necessary server access for…— Multichain (Previously Anyswap) (@MultichainOrg) May 31, 2023

Binance CEO Changpeng Zhao said that the exchange’s team is ready to help solve the Multichain problem, and assured that the hack did not affect the platform or its users.

Looks like another hack happened on Multichain. This DOES NOT affect users on @Binance or @Binance itself. We have swapped all assets out and closed deposits a while back. Regardless, we offer our assistance in helping with the situation.Stay #SAFU. https://t.co/GGInbxFkic— CZ 🔶 Binance (@cz_binance) July 7, 2023

On July 2, the Poly Network DeFi protocol was hacked, resulting in hackers releasing 57 crypto assets worth billions of dollars across 10 networks. The incident affected Ethereum, BNB Chain, Polygon, Avalanche, and Heco blockchains, among others. According to PeckShield, the hackers managed to steal only $5 million.