Recent significant outflows from the Multichain MPC bridge platform have raised alarms of a possible multimillion-dollar exploit. On July 6, approximately $102 million worth of cryptocurrency was withdrawn from Multichain’s Fantom bridge, $666,000 from Dogechain, and $5 million from Moonriver.
The Fantom bridge’s smart contract witnessed the withdrawal of 7,214 Wrapped Ether (WETH) tokens worth $13.6 million, 1,024 Wrapped Bitcoin (WBTC) worth $31 million, and $58 million worth of USD Coin, amounting to a total of $102 million in cryptocurrency.
Furthermore, the Ethereum contract of the Dogecoin bridge saw a withdrawal of $666,000, which constituted over 86% of its total deposits, leaving only around $100,000 worth of assets remaining. Similarly, the Multichain Moonriver bridge contracts on Ethereum experienced a withdrawal of $5,872,661 worth of USDC and Tether, leaving only approximately $700,000 remaining.
Speculations of a potential exploit emerged, with various on-chain investigators highlighting the unusual transactions on Twitter. PeckShield, a blockchain security firm, notified the Multichain team about the Fantom bridge transactions, suggesting they investigate the matter.
While it is unclear whether the contracts were genuinely drained or if users simply withdrew a substantial amount of funds, the event sparked concerns of a possible hack. Multichain acknowledged the abnormal movements on Twitter and stated that the team was uncertain about the cause, emphasizing ongoing investigations.
Multichain operates as a multi-party computation (MPC) bridging network, facilitating the transfer of assets between different chains. The network follows a process where assets are locked on one chain, derivative assets are minted on the target chain, and withdrawals involve the destruction of derivative coins on the second chain before releasing the backing assets on the first chain.
The Multichain team claims that the cryptographic keys controlling this process are distributed across multiple shards within the network, aiming to prevent unauthorized withdrawals by any single entity. But the platform has encountered undisclosed technical issues in recent weeks, including delays in transactions and the CEO’s absence, as well as Binance suspending withdrawals of specific Multichain derivative tokens due to transaction processing failures.
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