Multichain CEO’s Telegram Return Fuels Speculation Among Creditors

The Telegram account of Zhaojun He, CEO of Multichain, recently became active again after being dormant for six months. The status of the account now reads 'last seen recently' rather than 'last seen a long time ago', suggesting that it has been accessed in the last few days. This change has sparked speculation among users who lost money, questioning whether the CEO has regained phone access or if the Chinese police are accessing the account to prevent its auto-deletion due to inactivity.

Multichain, once the leading cross-chain bridge, faced significant operational issues last summer when its CEO disappeared reportedly following an arrest by Chinese authorities. As the CEO had control over all the validators, the bridge ceased functioning. 

Since then, the project has descended into chaos, with some team members deleting their social media accounts and others starting their own bridges and promoting them through Multichain’s X account. There was also an incident where the bridge briefly went online, allegedly to enable insiders to make millions in profit.

The opacity of Chinese law enforcement makes it challenging to understand the full scope of these events unless one has insider information. Some speculate that the Multichain team encountered legal troubles in China due to the platform being used for illicit fund transfers, potentially leading to police seizing the funds without public explanation.

Multichain was a crucial component of the Fantom network, which was significantly impacted by the bridge’s failure. Andre Cronje, co-founder of the Fantom protocol, recently commented on the situation:

“Local police in China, as part of a large scam investigation, tracked stolen funds to Multichain. Not in a way that Multichain was involved, but that the stolen funds were bridged via Multichain. This nuance is the core of the issue. As the stolen funds were “held” by Multichain, the majority of node operators were arrested and forced to hand over their access & keys. Using this access the police then seized the assets and are currently holding it as part of the ongoing investigation.”

Cronje also mentioned that efforts are underway to resolve the situation, involving law firms in Singapore, where Multichain is incorporated, coordinating with a law firm in China. There have been two preliminary court appearances, with a third scheduled soon. 

However, as Cronje indicated, resolution of such regulatory, legal, and criminal investigation-related matters often takes years, so an immediate solution is unlikely.

Interestingly, despite this, the Multichain website remains active, leading users who are unaware of the situation to continue losing money through the malfunctioning bridge.