Stablecoin issuers Circle and Tether freeze over $65 million in assets following an unexplained transfer from Multichain, causing the suspension of its operations and prompting investigations into the abnormal asset movement.
Multichain, the cross-chain router protocol, has halted its operations after an unexplained transfer of crypto assets worth millions of dollars occurred on July 6 in a surprising turn of events. As a result, stablecoin issuers Circle and Tether have taken action by freezing over $65 million in assets associated with the suspected exploit of Multichain.
According to reports, the Multichain MPC bridge experienced significant outflows on July 6, prompting investigations into the matter. The knowledge graph protocol 0xScope revealed that three addresses, which received approximately $63.2 million in USD Coin (USDC) from Multichain, have now been frozen.
Additionally, the Fantom Foundation reported that more than $2.5 million in Tether (USDT) has been frozen from two addresses identified as “Multichain Suspicious Addresses” on Etherscan.
The abnormal transfer of assets affected various wallets, resulting in the withdrawal of over $125 million worth of cryptocurrencies. Multichain’s Fantom bridge, as well as ecosystems like Dogechain, Moonriver, Kava, and Conflux, were all impacted by the incident. The cause of the asset transfer remains unclear.
Multichain took to Twitter to announce the suspension of its services, providing no specific timeline for resumption. The company urged users to refrain from utilizing its bridging service, cautioning that all bridge transactions would be stuck on the source chains.
Michael Kong, the CEO of Fantom protocol, remarked that the funds transfer did not appear to be a typical hack, as the assets sent to the alleged attacker’s wallets were not subsequently moved elsewhere. Ongoing investigations are being conducted to shed light on the situation.
Multichain’s platform enables users to transfer tokens across different networks. The project has faced challenges in both technical and operational aspects since its leadership went missing a few weeks ago. Bridging services like Multichain have become attractive targets for crypto hackers, with several incidents reported in 2022 alone.
A recent report by blockchain security firm SlowMist revealed that over $30 billion in crypto assets has been hacked in hundreds of incidents since 2012. The most common types of hacks include smart contract vulnerabilities, rug pulls, flash loan attacks, scams, and private key leaks.
Exchange hacks accounted for 118 incidents, Ethereum ecosystem hacks numbered 217, BNB Smart Chain ecosystem hacks totaled 162, EOS ecosystem hacks amounted to 119, and non fungible tokens (NFTs) were involved in 85 hacks. The cumulative losses from crypto exchange hacks alone exceeded $10 billion in the past decade.