Cross-Chain Bridge Project Hit by Hack, Leaving Assets Locked and Users at Risk
Multichain, a cross-chain bridge protocol, has suffered a significant loss of crypto assets totalling $126 million due to an “abnormal” transfer of funds. The exploit, which occurred in May, has resulted in the assets being locked and inaccessible. The bridge, known for facilitating cross-chain transfers, had a total liquidity of $1.25 billion, according to DeFiLlama.
In a tweet, the Multichain team confirmed that the stolen assets were being moved to an unknown address, describing the situation as abnormal.
PeckShield, a blockchain security firm, tracked the stolen tokens, which included Wrapped Bitcoin (WBTC), Chainlink (LINK), and stablecoins such as Circle’s USDC, Tether’s USDT, and Dai (DAI). The funds were found to have been transferred to six new Ethereum addresses.
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The most significant withdrawals of $118 million occurred on the Fantom blockchain, affecting four chains, including Ethereum, Avalanche, and Binance Smart Chain. Curve Finance, the largest decentralized stablecoin exchange, warned its users about using the bridge, hinting at a potential hack nearly nine hours before the Multichain team confirmed the transfers.
Dj Qian, co-founder of Multichain, acknowledged the hack and assured users that other cross-chain swaps on the platform remained secure. He recommended that all users who had utilized Multichain revoke permissions immediately.
As of now, the $126 million worth of cryptocurrencies have not been moved to a centralized exchange or deposited into a mixing service, raising concerns about the potential liquidation and dispersal of the funds.
This incident adds to the growing list of vulnerabilities associated with cross-chain bridges, which have become attractive targets for hackers. According to DeFiLlama data, bridges account for 48% of the total $5.44 billion hacked from DeFi protocols, amounting to $2.66 billion.
Multichain’s troubles began in late May when users reported transaction delays. Rumours circulated about the arrest of Multichain CEO Zhaojun in China, and the team admitted to being unable to contact Zhaojun, who held the private key to the locked pools. Binance, which had previously suspended certain Multichain token deposits, halted their withdrawals on July 5.
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The latest exploit serves as a reminder of the inherent risks involved in cross-chain bridge protocols. It underscores the need for heightened security measures and thorough audits to ensure the protection of user funds and the stability of the decentralized finance ecosystem. As the investigation into the hack continues, users and the broader crypto community will closely monitor developments and assess the impact on Multichain and the broader cross-chain bridge space.
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Written by Agbo Obinnaya
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