Multichain (MULTI), a cross-chain protocol, has suspended operations today after verifying the erroneous payment transfers from its MPC address.
According to blockchain security company Peckshield, Multichain was hacked for $126 million, with money being transferred between its Fantom (FTM) and Moonriver (MOVR) bridge by the assailant.
Multichain recommended that users cancel any protocol-related approvals after the event. A statement from the Fantom Foundation stated that it was “evaluating the circumstances and will provide an update as soon as we have more to share.”
Although the specifics of the attack have not yet been made public, early reactions from the community point to a potential compromise of the protocol’s private key.
The attack was linked to a private key compromise, according to CertiK, its smart contract auditor, who also noted that this was beyond the purview of its prior audit.
An on-chain detective, Loki Zeng backed up this assertion by pointing out how long the asset transfer was. According to Zeng, the attacker might have gained total control of the protocol’s private key fragments that surpass the threshold.
The impact of the vulnerability is said to spread to other chains like Kava, Dogechain, Conflux, and ETHW, according to Web3 Knowledge Graph Protocol 0xScope.
Multiple stablecoin assets across these chains have depegged. The team behind the ICE cryptocurrency project, according to Daniele Sestagalli, has chosen to destroy the $1.85 million worth of ICE tokens affected by the exploit.
He also said that a new coin called WAGMI would be airdropped to users of the Fantom Multichain from the burned tokens.
Multi down 16%
The MULTI token from Multichain fell by more than 16% due to the attack, reaching $2.60 at the time of writing.The protocol has been having problems lately, and the exploit has worsened.
The Multichain team lost touch with CEO Zhao Jun in May amid allegations that he had been detained in China. Coincidentally, the protocol experienced a botched upgrade of its cross-chain bridge around the same time period, which the developers blamed on “force majeure” circumstances.
In light of the current difficulties, Binance halted support for eight bridging tokens from the cross-chain protocol earlier this week until further notice.
