Policy & Regulation·May 26, 2023
Silence From Multichain’s Chinese Developers Stokes Fear
Silence From Multichain’s Chinese Developers Stokes FearA prolonged silence from the project leadership behind Multichain, a cross-chain routing network, is causing growing concern among the users of the cross-chain protocol. The network currently holds $1.5 billion in total value locked (TVL).The protocol has experienced five days of stuck transactions, and multiple cross-chain bridge pathways, including Kava, zkSync, and Polygon zkEVM are still offline. Initially, the project’s China-based team attributed the issues to an upgrade that was being fixed. That explanation was changed recently to an ambiguous “force majeure,” leaving users with more questions than answers.Photo by Santiago Lacarta on UnsplashPossible arrests in ChinaAdding to the uncertainty are rumors circulating on Twitter that the core leadership team may have been arrested in China. Although the rumors remain unconfirmed, they have contributed to the growing sense of unease within the community. DJ Qian, one of the co-founders of Multichain who is no longer involved with the project, took to Twitter to share his attempts to seek clarification. Qian mentioned reaching out to Multichain CEO Zhaojun and founding partner Xu Guochang for technical assistance. When asked about Zhaojun’s availability, Qian stated that he was “not available yet.”Users and investors eagerly await updates and clarity from Multichain’s leadership team. However, the team’s lack of communication extends across various forms of social media. In group Telegram messages with the Multichain team, there have been no responses from Zhaojun, and direct messages through the same app have gone unanswered as well. This silence has left the community members puzzled, with little information to rely on.$MULTI price plummetsMeanwhile, the price of Multichain’s native token, $MULTI, has continued to decline. It currently stands at $4.37, representing a 20% decrease over the past 24 hours. The lack of communication and uncertainty surrounding the project have likely contributed to this downward trend in token price. Over the course of the past seven days, the token has decreased in price by 45%.In response to the situation, layer 1 blockchain project Conflux Network has taken precautionary measures by suspending Multichain’s co-mint privileges. This move prevents Multichain from minting tokens on the Conflux blockchain. The Conflux Network has also assured users that it will work with them in case any losses arise due to the ongoing issues.Flight to safetyOther projects and individuals have also reacted to the silence from Multichain’s team. Hong Kong-based HashKey Group, a crypto investment firm, has transferred $250,000 to crypto exchange Gate.io as a precautionary measure. Tron founder Justin Sun has withdrawn 470,000 of the $USDD stablecoin from the Multichain protocol. These actions reflect a growing concern among stakeholders, representing their efforts to mitigate potential risks associated with the uncertainty surrounding Multichain.Furthermore, the Fantom Foundation has withdrawn $2.4 million in liquidity of the protocol’s native $MULTI tokens from the decentralized exchange SushiSwap. It later tweeted out an update stating that the Fantom-Multichain bridge was operating as normal. These withdrawals signal a loss of confidence in Multichain and its native token, as stakeholders seek to protect their investments.As the silence persists, users and investors remain anxious for updates and clarifications from Multichain’s leadership team. The lack of communication and the circulating rumors have cast a shadow of uncertainty over the project, leaving stakeholders in a state of limbo.
