Multichain Bridge Trouble Again, $130M Assets Withdrawn For Unknown Cause

Key Points:

• Many crypto users discovered that the Multichain cross-chain bridge was transferring large amounts of crypto to the outside world for unknown reasons.
• The incident affects about $130 million in assets on Fantom, Moonriver, and Dogechain chains.
• Multichain has yet to release any information about the above transfers and asked users to stop using the service in conjunction with revoking approvals.

Nearly $130 million worth of tokens were withdrawn from the Multichain bridge on the Fantom network, and security firms speculated that this could be a security flaw.

The tokens transferred include $58 million USDC stablecoin, 1020 WBTC (approximately $30.9 million), 7,200 WETH (approximately $13.7 million), and $4 million DAI stablecoin (valued at around $30.9 million) of the above 4 tokens over $100 million), also includes other tokens such as Chainlink, Curve DAO, YFI, Wootrade Network and almost a quarter of UniDex’s total supply.

Assets also appear to be moving on Multichain’s Moonriver bridge, including 4.8 million USDC and 1 million USDT. Dogechain also experienced unusual fund flow. At least 660,000 USDC was sent to the same wallet as Moonriver’s fund flow.

Security firm Paidun questions whether this could be related to the addition of support for four tokens (USDC, USDT, WETH, and WBTC) on the LayerZero cross-chain platform, which overlaps but is only partially consistent with the tokens being migrated.

LayerZero CEO Bryan Pellegrino responded that the issue had nothing to do with the platform and believed it was a hack targeting Multichain. According to Pellegrino, users of the Multichain bridge can withdraw assets, bringing them to LayerZero.

However, Igor Igamberdiev, research director at Wintermute, says that this is likely the job of whoever controls Multichain, as Fantom funds are not destroyed when the transaction occurs. Igamberdiev also noted that oddly enough, the wallet that received the bulk of USDC also made a transaction from the old Binance Smart Chain bridge a few hours earlier.

Earlier today, Bridge Protocol announced that locked assets had been moved irregularly, and users were advised to suspend the use of Multichain services in conjunction with the revocation of all approvals chain-related contracts.

The incident caused great disappointment to the community because the operation of Multichain resumed not long after the incident at the end of May 2023. This project once caused a stir with the news that the CEO was arrested by the Chinese police and lost access to the bridges, causing all activities to be stopped.

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