On July 6, massive withdrawals were recorded from the Multichain MPC bridge, triggering multiple warnings of possible exploitation. More than $125 million in crypto was withdrawn from the protocol.
The Multichain project team alerted users that assets locked on the MPC cross-chain bridge’s smart contracts were withdrawn to an unknown address. The crypto community on Twitter immediately started spreading rumors about the platform being hacked, but the project team didn’t confirm it.
The largest amount was withdrawn through a smart contract on the Fantom network — about $102 million in crypto, among which:
- $13.6 million in Wrapped Ethereum (WETH);
- $31 million in Wrapped Bitcoin (WBTC);
- $58 million in USD Coin (USDC).
There were also substantial withdrawals from cross-chain bridges of other blockchain networks connected to Multichain:
- the Dogechain bridge was drained by 86%, with $666,000 withdrawn from it;
- the Moonriver bridge saw more than 90% of funds withdrawn, worth about $6 million in USD Coin (USDC) and Tether (USDT);
- another $16 million in stablecoins was withdrawn from Kava and Conflux bridges.
Such massive outflows from the protocol raised concerns about the possible exploitation of the system. The Multichain team confirmed that these movements are abnormal and the platform suspended operations pending an investigation.
Major stablecoin issuers, in turn, halted transactions with assets related to the alleged exploitation of Multichain. Thus, Circle and Tether froze over $65 million linked to suspicious withdrawals from the protocol:
What’s notable is that shortly before the incident, Multichain faced a series of technical problems related to the disappearance of its Co-Founder and CEO Zhaojun, who was rumored to have been detained by Chinese law enforcement. Binance reacted instantly to the news and suspended the ability to interact with the protocol, attributing its decision to delays in transaction processing. After the hack, Changpeng Zhao, CEO of the crypto exchange, once again emphasized that users should remain calm and that Multichain’s problems have no impact on Binance.
However, some members of the crypto community suggested that the funds were simply withdrawn by users. According to Michael Kong, CEO of Fantom, the fund transfers “do not appear to be a normal hack” as the assets weren’t transferred beyond the address of the alleged exploiter.
While the crypto community is debating whether the funds withdrawn from Multichain were stolen or not, scammers are actively taking advantage of the growing FUD effect. Reports of an urgent giveaway of Fantom tokens (FTM) began circulating on Twitter, ostensibly due to the network’s vulnerability following the attack on Multichain. Attached to the post was a phishing link that supposedly confirmed that the airdrop was initiated by the Fantom Foundation. Yet, the crypto community immediately recognized the scammers, and the post was removed.
According to a recent report by SlowMist, over $30 billion in crypto-assets have been stolen in hacker attacks over the past decade. For example, more than 1,100 attacks have been reported since 2012:
- 217 protocol hacks in the Ethereum ecosystem, which cost the crypto community more than $3 billion;
- 162 hacks on BNB Chain projects, as a result of which hackers managed to steal ~$1.5 billion;
- 118 hacks on crypto exchanges, from which hackers withdrew nearly $11 billion;
- 85 attacks on NFT projects that brought hackers ~$200 million;
- 38 cross-chain bridge attacks that resulted in ~$2 billion in crypto stolen;
- 36 crypto wallet hacks that resulted in over $408 million in crypto stolen.
About 50% of all attacks on the DeFi sector come specifically from cross-chain protocols, the most vulnerable segment of the decentralized finance market.
