We do the research, you get the alpha!
Crypto exchange Binance today announced that it is ceasing all deposits and withdrawals for the ten Multichain-bridged tokens that were previously part of a deposit suspension by the exchange after certain transactions on the Multichain (MULTI) protocol froze in May.
The ten tokens are bridged to Binance Chain, Ethereum, Avalanche, and Fantom; users can still withdraw them via other networks supported by the exchange.
The mysterious problems afflicting Multichain’s cross-chain bridge began back in late spring after users flooded Multichain’s Telegram complaining that certain pending transfers were stuck.
At the time, rumors swirled that Chinese authorities had arrested several Multichain executives, including its chief executive officer Zhaojun. The protocol later confirmed on Twitter that its CEO was missing and that he had sole access to the blighted servers responsible for the delays.
What happened to Zhaojun remains a mystery, but Bobie, the founder of Web3 knowledge graph protocol 0xScope, tweeted on June 5 that Multichain had partially resumed operations, a possible sign that the CEO was “unjailed.”
A bridge too far?
A lot of negative press has surrounded cross-chain bridges due to their perceived vulnerabilities. Ethereum co-founder Vitalik Buterin is one of a number of prominent crypto figures who have cautioned against relying on cross-chain bridges.
In a blog post this year, Buterin advised people to “try to minimize how much you rely on bridges at all,” adding that crypto users should “hold assets on the chain where they originate.”
Cross-chain bridges have also become a common target for crypto hackers—including the Multichain protocol. In early 2022, $3 million was drained from Multichain by multiple hackers. A whitehat hacker later returned $900,000 of it.
Barely two months later, Axie Infinity developer Sky Mavis was the target of one of the largest hacks of all time, when attackers drained $622 million from the bridge connecting Sky Mavis’s custom Ronin sidechain to Ethereum.
In the wake of the attack, Binance led a $150 million funding round to reimburse victims. Contributors included Animoca, the company behind the popular crypto game The Sandbox, and tech venture capital firm a16z.
Another Binance-affiliated entity was the target of a colossal bridge hack months later.
In October, attackers were able to steal $100 million in cryptocurrencies from the “cross-chain bridge between BNB Beacon Chain (BEP2) and BNB Smart Chain (BEP20 or BSC),” according to an official post.
Clearly, the security of cross-chain bridges is one of the industry’s top priorities as crypto continues to grow.