Major stablecoin issuers, Circle and Tether, have frozen assets totaling over $65 million linked to a potential exploitation of the cross-chain router protocol, Multichain. The move is in response to the mysterious and significant outflows of more than $100M from the Multichain MPC bridge on July 6.
As per 0xScope, the knowledge graph protocol, three recipient addresses, associated with at least $63.2 million in Circle’s USD Coin (USDC), are now under suspension. Concurrently, Fantom Foundation released a report confirming that Tether (USDT) also froze over $2.5 million from two addresses earmarked as “Multichain Suspicious Addresses” by Etherscan, a popular Ethereum block explorer.
Unusually large withdrawals exceeding $125 million in cryptocurrencies were detected from several wallets on July 6. These transactions have disrupted the ecosystems of Multichain’s Fantom bridge, Dogechain, Moonriver, Kava, and Conflux. The inexplicable and substantial asset transfers continue to baffle industry experts. Multichain issued a statement via Twitter that it has temporarily suspended all services, discouraging users from leveraging their bridging service and stating that “all bridge transactions will be stuck on the source chains.”
Michael Kong, CEO of Fantom protocol, offered an intriguing insight, suggesting that this may not be a typical case of hacking. He noted that the assets transferred to the presumed attacker’s wallets had not been moved elsewhere, adding a layer of complexity to the ongoing investigation.
Multichain, a platform that facilitates token transfer across different networks, has faced a series of technical and operational setbacks following the unexplained disappearance of its leadership team. Crypto hackers often target bridges like Multichain, with several incidents recorded in 2022.
A recent study by blockchain security firm, SlowMist, disclosed that from 2012, hackers have stolen over $30 billion in crypto assets in a multitude of incidents. The most prevalent forms of these crypto crimes include smart contract vulnerabilities, rug pulls, flash loan attacks, scams, and private key leaks.
The SlowMist report provided a detailed breakdown of the incidents, which included 118 exchange hacks, 217 Ethereum ecosystem hacks, 162 BNB Smart Chain ecosystem hacks, 119 EOS ecosystem hacks, and 85 nonfungible tokens hacks. The total loss from crypto exchange hacks over the past decade has surged beyond $10 billion.
The incident involving Multichain underlines the pervasive security risks in the cryptocurrency industry, with hackers often preying on vulnerabilities in these systems. The freeze by Circle and Tether illustrates the industry’s commitment to maintaining trust and minimizing potential losses, even as the investigation into the unexplained transactions continues.
