DeFi

Singapore court rules $125M Multichain hack was inside job – DL News

Published

6 months ago

17 July, 2024

Singapore court rules $125M Multichain hack was inside job – DL News

Fantom Foundation director Michael Long has long had doubts about Multichain’s story.
A Singapore judge has ordered Multichain to pay Fantom $2.2 million.
Reported arrests in China muddy the waters as to where the money went.

When Multichain close Last summer, after an apparent hack of $125 million in cryptocurrency, Michael Kong dismissed speculation that it was an inside job.

As CEO of the Fantom Foundation, Kong was dismayed to see his project burn when all that cryptocurrency was mysteriously transferred to “unknown addresses in an abnormal manner.”

But Kong couldn’t get his head around the fact that Multichain was a thriving business. Why ruin it?

Kong is not so sure anymore.

In an interview earlier this year, Kong said he couldn’t rule out that someone affiliated with Multichain had managed to get hold of the money. “My perspective has changed a little bit,” he said. DL News“I had a little too much faith in what Multichain was telling us.”

A court ruling now appears to lend credence to Kong’s suspicions.

On July 8, Judicial Commissioner Mohamed Faizal of the High Court of Singapore governed that Multichain owes the Fantom Foundation, the organization that manages the Fantom blockchain, $2.2 million.

A court decision

Fantom, once a top-five blockchain with nearly $8 billion locked in its DeFi ecosystem, now sits just outside the top 50. As of Tuesday, DeFi applications on Fantom managed to generate a total of $129 million, just over half of what they did before the hack.

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On the eve of last year’s exploit, much of the crypto in Fantom’s DeFi ecosystem came from Multichain, a “bridge” that allows users to move digital assets between otherwise incompatible blockchains.

The total value of cryptocurrencies in Fantom’s myriad DeFi applications plummeted after the Multichain incident.

“[Fantom’s] position is that the violation was possible because the CEO of [Multichain] “He had ultimate privileges and control over the cryptocurrency assets stored in the multi-chain bridge,” Faizal wrote in his decision.

This violated the company’s user agreement, the judge said.

The decision could pave the way for the appointment of a third-party liquidator and the eventual return of the stolen tokens, according to the Fantom Foundation.

Faizal also noted that Fantom believes the “siphoned assets” may have been “illegally diverted” from one Multichain entity to another.

The judge was quick to add, however, that this allegation fell outside the scope of the legal case before him.

$1.8 billion lost

The lawsuit sheds more light on an episode that took place during a series of exploits a few years ago.

In 2022, the bridges lost $1.8 billion in hacks, a figure that represents more than half the value of cryptocurrencies stolen from DeFi protocols that year.

A representative for Multichain could not be reached for comment. The company has not defended itself at any point in the Fantom case. trial in Singapore, which started in 2023.

A person familiar with the inner workings of Multichain said DL News The company team had not planned any internal work.

“The truth will be known when the police make the case public,” said the person, who spoke on condition of anonymity out of fear for his family in China.

“It’s conceivable that someone from the police force targeted the CEO of Multichain and said, ‘Hey, he’s got money.

— Michael Kong, Fantom Foundation

Kong claims that former Multichain employees have been “totally uncooperative.”

Multichain is a “bridge” that allows users to move digital assets between otherwise incompatible blockchains. Users on blockchain A can deposit cryptocurrencies into Multichain, which will issue IOU tokens on blockchain B, where they can be used as if they were real.

Arrests in China

In May 2023, founder and CEO Zhaojun He was arrested by police in the southern Chinese city of Kunming, according to a statement made by the company after the hack.

Despite the team’s efforts to keep the bridge up and running after Zhaojun’s disappearance, Multichain suffered an apparent hack on July 7, 2023, when $125 million in crypto was transferred to “unknown addresses in an abnormal manner,” the company said.

Two days later, Zhaojun’s sister tried to salvage what was left, the company said. She transferred much of the remaining cryptocurrency to wallets she controlled, only to also be detained on July 13.

Strapped for cash and unable to contact the CEO or his sister, Multichain said it would shut down and share information as it became available.

For some, the case has become a warning about operational security failure and running a business in a crypto-hostile police state.

Others, without evidence, suggested in a “Multichain Scam” Telegram chat group with over 500 members that Zhaojun and his sister had absconded with the missing cryptocurrency.

At the time, Kong said Multichain may have been the victim of a racketeering operation by local police. He added that employees had told him that some of their colleagues had been arrested.

Fantom investigates

A former employee, named Marcel, said DL News At least five people have been arrested, although this could not be independently verified.

“It’s conceivable that someone targeted the CEO of Multichain within a police force and said, ‘Hey, he’s got money, he’s pretty well-known in the industry. Let’s target him,’” Kong said. DL News last summer. “That’s what I think could happen.”

But evidence that has since emerged has changed that.

The Fantom Foundation, which hired a Hong Kong law firm called King & Wood Mallesons to investigate the situation, was able to confirm that Zhaojun had indeed been arrested, Kong said. DL News.

Jail

Although Zhaojun is likely still awaiting indictment, his colleagues at Multichain have had better luck.

“We understand that some of them have been arrested and released,” he said. “But we have had no contact with them for months because Multichain and its former team members have been completely uncooperative.”

A mysterious arbitration

In November, the Multichain Bridge was open for about two hours, allowing a user to take advantage of a $1 million arbitrage opportunity. The profits were then transferred to Binance, the world’s largest cryptocurrency exchange.

So who is behind this move? “We believe it is a person (or several people) from the old Multichain team,” Kong said. DL News this week.

Earlier this year, he said it was unlikely the police had moved any funds because they would likely have used a different method.

The possibility of Multichain’s involvement was raised in court.

In his ruling, Faizal noted that the Fantom Foundation had sued two entities: Multichain Foundation Ltd, which ran the crypto bridge, and Multichain Pte Ltd.

This is because of the “sudden incorporation” of Multichain Pte Ltd “just before the July 7 security breach” and the foundation’s “belief that the siphoned assets could have been illegally diverted” to the entity, Faizal wrote.

But the Commissioner made it clear that this allegation fell outside the scope of his decision.

“I do not comment on the merits of these claims regarding the involvement of [Multichain Foundation] And [Multichain Pte]”I am not convinced of the validity of these claims,” he wrote.

Regardless, the Fantom Foundation has yet to find a definitive answer as to what happened.

“We’re not quite sure yet,” Kong said. “Some [crypto] “The movements were confusing.”

Aleks Gilbert is DL News“New York-based DeFi correspondent. Got a tip? You can reach him at aleks@dlnews.com.

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DeFi

If You Missed BONK and PEPE This Year, This Viral New Crypto Might Be Your Salvation

Published

6 months ago

29 July, 2024

CoinFlix Staff

If You Missed BONK and PEPE This Year, This Viral New Crypto Might Be Your Salvation

Bonk and Pepe appear set to net new investors 10x to 100x returns over the next 12 months. However, cryptocurrencies in the DeFi play-to-earn gaming sector could offer even greater returns. As August approaches, Rollblock is emerging as a standout DeFi play-to-earn gem with the potential to 100x-1000x gains in the fourth quarter and beyond.

The project features an innovative revenue sharing model and exceptional accessibility, attracting players and investors. Additionally, Rollblock’s extensive game library of over 150 titles and enhanced sports betting are further driving excitement for the platform. Cryptocurrency analysts are expecting a sudden surge in demand. 800% a push for Rollblock from the beginning of September.

Bonk remains strong despite market fluctuations

While most well-known cryptocurrencies struggled throughout July, Bonk remained strong. As one of the highest-grossing meme cryptocurrencies of 2024, Bonk rose over 24% in July, while most cryptocurrencies experienced negative fluctuations.

Investors looking to add a relatively safe memecoin to their portfolio should consider Bonk. While Bonk is unlikely to generate explosive gains of 250x to 1,000x from here on out, Bonk could still theoretically provide returns in the 20x to 100x range.

Pepe should see a big rise in the next bull run

Alongside Bonk, Pepe has yet to go through a bull run. This means that there are still substantial gains to be made from Pepe over the next 12 months.

Pepe is down 4% in 30 days, but that shouldn’t worry Pepe investors in 2024. Experts believe Pepe’s best days are still ahead, with crypto analysts predicting a 10x to 50x surge in the next election cycle around November.

In the long term, Pepe could surpass the 100x mark for today’s investors. However, Pepe is a memecoin, and one should exercise caution when investing in purely speculative assets that have no utility.

Rollblock’s Unprecedented Hype Potential Could Push It Past 100x Valuation in Q4

Rollblock is a GambleFi Play-to-Earn token that integrates centralized and decentralized gambling on a single platform. By allowing players to earn rewards through active participation and gameplay, the platform creates a compelling incentive structure that appeals to both casual and competitive players.

With its cutting-edge blockchain technology, Rollblock offers top-notch security that keeps bets and transactions on the platform secure. The platform’s lack of KYC mandates appeals to both users who value anonymity and security.

Rollblock’s revenue sharing model, which allocates up to 30% of casino revenue to RBLK token holders, is a major draw for investors. The model involves burning half of the repurchased tokens and distributing the other half to stakers, increasing the token’s value and encouraging long-term investment.

The platform is also constantly evolving thanks to user feedback which has enabled updates such as the upcoming sports betting feature within the platform’s casino. This addition will complement Rollblock’s extensive game library of over 150 titles, ranging from traditional poker to innovative blockchain-based games.

RBLK is expected to emerge as one of the leading DeFi tokens in 2024. With a price of $0.0172 with impressive growth potential and over 140 million tokens sold recently, Rollblock is on track to enter the top 100 cryptocurrencies by Q4, making today a lucrative time to buy RBLK tokens.

Discover the exciting opportunities of the Rollblock (RBLK) presale today!

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DeFi

Cryptocurrency sector is experiencing ‘most misjudged moment’ since 2020, says venture capitalist Arthur Cheong

Published

6 months ago

29 July, 2024

CoinFlix Staff

Cryptocurrency sector is experiencing ‘most misjudged moment’ since 2020, says venture capitalist Arthur Cheong

Veteran cryptocurrency investor Arthur Cheong believes the digital asset sector offers long-term holders a golden opportunity.

Cheong, the founder of DeFiance Capital, tell His 171,700 followers on social media platform X indicate that he believes decentralized finance (DeFi) is hugely undervalued.

According to Cheong, DeFi projects are innovating at a rapid pace and leaving traditional financial (TradFi) companies in the dust.

“It’s been a long time since I’ve been this excited about the risk/reward and potential upside of DeFi. This is probably the most misjudged moment since the pre-DeFi summer of 2020, with extremely promising prospects.

I see opportunities not only in OG (original) DeFi, but also in some newer projects that are evolving rapidly and growing at a pace that fintech startups will do anything to match.

The veteran investor also believes that crypto is now here to stay following recent launch from the Ethereum spot market (ETH) exchange-traded funds (ETFs) last week.

“Overall, the floodgates are open and there is no turning back. TradFi asset managers will continue to launch new crypto products because, guess what: there is huge demand for them!”

I expect them to launch actively managed crypto ETFs [in the] coming years. ”

Earlier this month, Cheong laid that it might be a bad strategy for cryptocurrencies to seek mass adoption, believing that digital assets are designed to disrupt several key financial sectors.

“I think we should accept that cryptocurrencies may not be suited for mass adoption like Web2, but rather are optimized for some narrow but very high-impact use cases like stateless global money, cross-border payments, and decentralized finance.

Chasing mass adoption of normies may be chasing the wrong Grail from the start.

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Disclaimer: Opinions expressed on The Daily Hodl are not investment advice. Investors should do their own due diligence before making any high-risk investments in Bitcoin, cryptocurrencies or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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