Key Points

  • Multichain has released a report indicating that Chinese Police took away its CEO Zhao Jun on May 21, 2023
  • Multichain CEO Zhao Jun has not been heard from since May, and the MPC node operators have all their operational access keys to the MPC node servers revoked.
  • The company claims there is currently no access to Zhao Jun’s cloud server account; therefore, no one can log onto the MPC Servers.

Public communication indicates Chinese Police reportedly took Multichain CEO Zhao Jun in May; since then, no one has heard from him. Multichain suspiciously claims no one can access Jun’s cloud server; thus, everyone is locked out of MPC node servers and cannot access investor funds stashed away by his sister.

Multichain CEO Zhao Jun not heard from since May 

Multichain has released an announcement asking GoDaddy to help them bring down to keep customers from using the Multichain Service anymore. The team claims it wants to take this step as it lacks alternative sources of information and operational funds, forcing it to cease operations.

In connection to the missing of Multichain CEO Zhao Jun, the team has reported that it had established a connection with his family and learnt that all the tech devices belonging to Zhao Jun had been taken away by the Chinese authorities. They indicated that since its inception, Zhao Jun used to control all operational funds and investments from Multichain users.

As such, the team could only maintain the project through its remaining access to some non-MPC servers that had not been revealed yet. Also, according to a lawyer’s advice, the team intends to comply with the Multichain CEO Zhao Jun family’s demands to keep details of the Chinese investigations under wraps.

Multichain explained that it released the news of Multichain CEO Zhao Jun going missing on May 30 and explained its technical difficulties. It, however, says that Zhao Jun’s family seems to have some access to the cloud server platform though it’s not clear how far they can go as they do not intend to allow Multichain to access it.

“On June 4, Zhaojun’s family successfully logged into the cloud server platform using the historical information on his home computer. However, Zhaojun’s family only allowed Multichain team engineers physical access to the home computer to fix technical issues with Router2 and Router5.”

At the time, the family and lawyer were in contact with the authorities. They did not give Multichain detailed information though they said Jun would be released soon. On July 7, Jun’s sister transferred investors’ assets locked on the MPC addresses. On July 9, she transferred the remaining user assets to the router pool and notified the team to the EOA address controlled by her.

“The funds were transferred to EOA addresses controlled by Zhaojun’s sister. 0x1eed63efba5f81d95bfe37d82c8e736b974f477b 0x6b6314f4f07c974600d872182dcde092c480e57b”

The family contacted Multichain on July 13, saying that Jun’s sister was also in police custody, and now there is no contact with her. According to the Multichain team, the status of the assets she ‘preserved’ remains uncertain. There are no operational funds to keep Multichain afloat, necessitating the closure of the domain.

A rug pull at play?

A rug pull is a common type of crypto scams involving fraudulent developers luring investors into a lucrative project. At most times, there is always a flaw in the project code that allows the developers to have a back door to the funds accumulated.

In Multichain’s case, all these factors are satisfied. Multichain CEO Zhao Jun was in charge of controlling all funds, which means that no funds would flow from the accounts held by the protocol without passing through him. As such, it screams a centralized project.

Conveniently, he went missing, and all other MPC node operators were locked out of the MPC node servers. At the same time, the CEO’s sister transferred assets from secure MPC addresses to EOA addresses before conveniently going missing, after which Multichain now wants to bring down its website.

In all this, the team had nowhere communicated to investors about how funds flow. Also, they did not use litigation against the Jun family for denying them access to company funds while transferring them to their private addresses. Whether this is, a rug pull is up to you to decide.

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