Multichain, a prominent cross-chain bridge platform, has been forced to suspend its services following a significant outflow of assets totaling a staggering $126 million.
Quick facts:
- Multichain suspends services after $126 million asset outflow to unknown wallets.
- Security concerns arise as users are warned against using Multichain’s platform.
- Speculation surrounds the involvement of a white hat hacker, while Fantom tokens remain unaffected.
The sudden exodus has raised serious concerns and prompted Multichain to issue a warning to its users, advising them to refrain from utilizing its services until further notice.
The outflow involved a substantial number of cryptocurrencies being transferred to various third-party wallets from Multichain’s bridge deployments on Fantom and Dogechain.
Multichain Issues Warning to Users
Taking to Twitter, Multichain announced the halt of its services, stating, “The Multichain service has currently stopped, and all bridge transactions will remain stuck on the source chains. There is no confirmed resumption time. Please refrain from using the Multichain bridging service for now.”
This sudden disruption in service comes on the heels of a troubling incident where $126 million worth of assets vanished from the platform, mysteriously finding their way to unknown wallets.
Security firm PeckShield brought attention to the situation, highlighting the majority of the assets being withdrawn on the Fantom network, with a smaller portion moved on Dogechain.
Investigation Underway into $126 Million Asset Movement
Loki Zeng, an on-chain analyst and former Huobi Ventures researcher, weighed in on the matter, offering insights into the potential nature of the asset outflow.
Zeng speculated that the extended duration of the asset transfer process, coupled with a preliminary test transfer of $2 in stablecoins before the significant outflows, could indicate the attacker’s access to the private key shards controlling Multichain’s multi-party computation wallet.
Curiously, each type of cryptocurrency asset taken from Multichain was transferred to separate wallets, and no subsequent activity has been observed in these wallets since the transfers.
This has led Zeng to suggest the involvement of a white hat hacker, an ethical expert who employs their skills to safeguard funds rather than exploit them for malicious purposes. However, this remains an unconfirmed hypothesis at present.
In response to mounting concerns, the Fantom Foundation issued a statement specifically aimed at reassuring holders of Fantom tokens.
The foundation made it clear that Multichain did not issue or manage Fantom (FTM) and its related tokens. As a result, the crisis did not directly affect assets like wFTM, FTM ERC-20, and FTM on the Opera EVM network.
This incident marks another challenge for Multichain, adding to a series of previous issues. Users reported abnormal delays in the arrival of Multichainthe cross-chain funds in May 2023, signaling potential underlying problems within the platform.
Related: Poly Network Urges Users To Withdraw Funds After being hacked
Moreover, Multichain experienced a significant attack in July 2021, resulting in a loss of over $7.9 million in assets. These incidents have raised concerns about the overall security and stability of the platform.
As investigations continue, it is worth noting that the bridge still oversees an impressive $1.2 billion in assets across various networks. Affected users and the wider cryptocurrency community eagerly await further updates on the situation as well as the potential restoration of Multichain’s services.
