Crypto bridging protocol Multichain ceases operations after confirming Chinese police detained its CEO, Zhaojun, and his sister, who held ~$220M of user assets
Multichain’s shutdown follows a visible operational breakdown: it had already suspended multiple-chain services after losing contact with its CEO and being unable to obtain server access. That earlier loss of access to critical server controls showed that the protocol’s continuity depended on a small number of individuals.
The subsequent reported $130M exploit affecting user-supplied tokens added an immediate security crisis before the confirmation that roughly $220M of user assets was held by the CEO’s sister. Together, the episodes turn an infrastructure failure into a custody and governance failure for users.
First-order effects
Multichain users lose access to a bridge that has ceased operations, while assets held by the detained executive’s sister face an unresolved custody situation.
The protocol’s operators cannot rely on its prior administrative setup: the earlier inability to reach the CEO for server access has now culminated in a full service halt.
Second-order effects
Applications and users that depended on Multichain for cross-chain transfers must shift routes or pause activity, concentrating demand on alternative bridging infrastructure.
The sequence of a service suspension, exploit, and shutdown raises the due-diligence burden on bridge users and counterparties, especially around who controls servers and user funds.
Third-order effects
If similar incidents recur, cross-chain infrastructure will be judged less on technical interoperability alone and more on whether operational keys, custody, and recovery authority are distributed and auditable.
The case reinforces the crypto legitimacy gap: systems presented as decentralized can still expose users to concentrated operator and legal-jurisdiction risk.
The trend: Cross-chain crypto services are moving toward a harder test of resilience: technical security must be matched by governance and custody arrangements that do not depend on a few individuals.
1. On May 21, 2023, Multichain CEO Zhaojun was taken away by the Chinese police from his home and has been out of contact with the global Multichain team ever since. The team contacted the MPC node operators and learned that their operational access keys to MPC node servers had..…
Another day in the life of decentralisation theatre. The M in MPC stands for “multiparty”, but in this case all the MPC keys were held by one person, and all the MPC nodes were run under that one person's cloud server account. It was not decentralised in any way, shape, or form.
It turns out one of the more popular cross-chain bridges in “Crypto” that used an MPC multi-sig node scheme to protect funds in “crypto” was actually all controlled by 1 person. This person was arrested, and the funds are now frozen.
Amazing story. Dude gets thrown in jail, admin keys to Multichain are on his computers, sister eventually uses his computer to steal money, now she's in jail too. THIS IS WHY WE DECENTRALIZE. Tech will never defeat human nature.
pretty bizarre that multichain's multi-party computation wallet was controlled by a single party. and that party, the CEO, is now in jail in the single-party state nothing multi in this situation
The code is the law. Multibridge's code was too weak: not decentralised enough. Security audits had not focused on the bridge deployment topology on how many bridge operators there are and how distributed they are. The Chinese government now has your tokens. China does not...
The “multi-party computation” nodes were in fact all running under the control of CEO Zhaojun who has now been arrested by China police.🤦♂️ Maybe people will start to take decentralisation seriously again rather than the recent tendency to allow completely centralised components…