Cryptocurrencies Withdrawn from Multichain Platform

On July 6, a tectonic shift in the crypto landscape occurred when abnormally large outflows from the Multichain MPC bridge platform sparked fears of an exploit. Over $102 million worth of crypto was withdrawn from Multichain’s Fantom bridge on the Ethereum side, as well as $666,000 from Dogechain and $5 million from Moonriver.

The withdrawals included 7,214 Wrapped Ether (WETH) tokens (worth $13.6 million), 1,024 Wrapped Bitcoin (WBTC) (worth $31 million) and $58 million worth of US Dollar Coin (USDC). In addition, the Dogechain bridge’s Ethereum contract saw a withdrawal of $666,000, representing more than 86% of its total deposits. $5,872,661 worth of USDC and Tether (USDT) were withdrawn from the Multichain Moonriver bridge contracts on Ethereum.

Several on-chain sleuths took to Twitter to label the event as a possible exploit. Blockchain security firm Peckshield tagged the Multichain team in a post showing the Fantom bridge transactions, saying “You may want to take a look.” Gemini Crypto, Gala Crypto, AMP Crypto, Today, Crypto Cardano, Genesis Crypto, Polygon Crypto, Solana Crypto, and Shiba Inu Crypto all experienced the effects of this large withdrawal.

Dogechain Multichain Drained?

This led one commenter to remark that it looks like “another massive hack.” On-chain investigator Spreek posted the Dogechain transactions with the comment “dogechain multichain drained.”

Cointelegraph could not confirm by the time of publication whether the contracts were “drained” or whether a large amount of funds were simply withdrawn by users.

Cointelegraph reached out to the Multichain team on their Discord channel, but did not get a response by the time of publication. Multichain‘s last post on Twitter was June 29.

Multichain is a multi-party computation (MPC) bridging network. When a user wants to bridge assets from one chain to another, the Multichain network first confirms that the assets have been locked on the first chain and then mints derivative assets on the second chain.

Crypto ETFs, Binance, and Polygon

When a withdrawal is made, the Multichain network works in reverse: it verifies that the derivative coins have been destroyed on the second chain, then releases the assets backing them on the first chain. The cryptographic keys controlling this process are divided into multiple shards and spread across the network, which should theoretically prevent any individual or group from making unauthorized withdrawals.

Recently, Multichain has experienced several technical issues. On May 31, the team announced that their CEO had gone missing and they were facing “multiple issues due to unforeseeable circumstances,” resulting in delayed transactions. On July 5, Binance suspended withdrawals of some Multichain derivative tokens, citing the network’s failure to process transactions quickly.

Asia Express has reported that crypto ETFs are gaining traction in Hong Kong, while Binance is warning of potential FOMO with Maverick tokens. In addition, the Polygon network was recently hacked.

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