Multichain, the cross-chain bridge protocol, has halted operations after its CEO was arrested by Chinese authorities. The multi-billion dollar project announced it has no choice but to wind down after losing access to vital resources following the executive’s detention.
According to an official announcement, Multichain CEO Zhaojun was taken into custody by Chinese police from his home. His sister was also detained at the same time.
Without access to Zhaojun and his systems, Multichain lost control of its infrastructure. The team revealed that all operational funds, server access keys, and wallet details were solely under the CEO’s control.
After his arrest, Multichain’s node operators revoked access to their servers. The team was left with no option but to inform users that it could no longer continue normal operations.
Zhaojun’s apprehension comes after Multichain suffered a $130 million exploit earlier this week. However, rumors of the CEO’s arrest in Shanghai first circulated last month amid speculation of regulatory issues.
Multichain says it tried to maintain services for as long as possible after Zhaojun’s sister transferred remaining user assets and notified relevant parties. But with her also unavailable, there is uncertainty over those preserved funds.
The project’s dramatic fall from grace serves as a warning for the decentralization of power within crypto projects. Over-reliance on a single individual, especially in jurisdictions with opaque regulations, leaves such protocols vulnerable to catastrophic failure.
As Multichain’s tale shows, even the most successful blockchains can unravel rapidly when out of the hands of their founding teams. The fate of users’ funds in such situations often remains an open question.