Crypto startup Multichain finds itself in a complicated situation just a week after rumors spread that some team members were arrested by Chinese authorities. The team posted an update on Twitter stating that they had encountered various unforeseen challenges within the past 48 hours. Multichain, previously known as Anyswap, reported that they were unable to establish communication with their CEO, Zhaojun, and could no longer access servers required for maintenance.
Multichain is a Web3 “router,” a bridging protocol that facilitates token swapping across different networks. However, the latest update unveiled issues with a network of nodes within Multichain called Router5, which have affected cross-chain services for various lesser-known blockchains such as Public Mint, Ekta, and ONUS. The team admitted that the problem is beyond their current abilities and permissions, deciding to suspend the corresponding cross-chain service for the affected chains on the UI.
DeFi apps operating on Multichain had a total value locked of $1.46 billion at the time of reporting, according to DeFiLlama. It remains uncertain whether users can still access those funds, and whether Zhaojun is the sole team member who can access the private keys controlling the protocol. Multichain’s native token, MULTI, has suffered a fall of around 50% since the news of its difficulties first emerged on social media on May 24.
While Crunchbase suggests that Multichain is headquartered in Singapore, there are concerns that key Multichain employees were arrested in China, although these reports are unconfirmed. Binance announced on May 25 that it would temporarily suspend deposits for specific tokens related to Multichain’s bridge while waiting for more information from the team.
In a separate incident, Chinese crypto outlet PANews reported this week that staff members behind yuan-backed stablecoin issuer Trust Reserve, formerly CNHC Group, were detained by local authorities. Trust Reserve’s offices have been emptied, with a sign reading “Judicial Seizure, No Vandalism.” It is unclear whether the two situations are connected, or whether the reported police attention is due to its work with cryptocurrency.
Source: Blockworks
