Multichain, the MPC bridge platform, has seen extraordinarily large outflows, leading to fears of a potential multi-million dollar exploit targeting the platform. The alarming movement, which saw over $130 million worth of crypto being transferred out from the platform, has sparked concerns among observers and investors.

These outflows were first noticed on July 6, when it was observed that $102 million worth of crypto was withdrawn from the Multichain Fantom bridge on the Ethereum side. In addition, $666,000 worth of Dogecoin and $5 million from Moonriver were withdrawn. Further, the Fantom bridge’s Ethereum smart contract saw the withdrawal of 7214 Wrapped Ether (WETH) tokens worth $13.6 million, 1024 Wrapped Bitcoin (WBTC) worth $31 million, and $58 million worth of the USDC stablecoin. The total value of the crypto removed by the end of the day amounted to over $100 million.

Additional Withdrawals Raising Concern

In addition to the massive withdrawals from the Multichain Fantom bridge, the Dogecoin bridge’s Ethereum contract experienced a withdrawal of around $666,000, which accounts for more than 86% of its total deposits. As a result, only around $100,000 worth of assets remains in the bridge. Similarly, the Multichain Moonriver contracts on Ethereum saw withdrawals of over $5.8 million worth of USDT and USDC. Currently, the Moonriver bridge contracts only have about $700,000 left.

Potential Exploit and Multichain’s Response

Various on-chain investigators took to Twitter, warning the community of a potential exploit. Blockchain security firm PeckShield tagged Multichain in a post, highlighting the Phantom chain transactions and urging the team to review. While Multichain did not respond initially, Fantom Foundation CEO Michael Kong assured the community that the Fantom team was looking into the issue.

Multichain eventually responded, confirming the abnormal movement of funds and stating that the team was “unsure of what was happening and is currently investigating the issue.”

Multichain’s Escalating Issues

Multichain operates as a multi-party computation (MPC) bridging network, allowing users to bridge assets between chains. However, Multichain has been drawing negative attention following technical issues in recent weeks. In May, the team announced that the CEO had gone missing, resulting in significant transaction delays due to unforeseen circumstances. Adding to the concern, Binance also announced a halt in the withdrawal of some Multichain derivative tokens due to network issues.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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The BNB Chain’s official Twitter account first stated that the temporary halt was being implemented owing to suspicious behavior on the blockchain, but then clarified that it was being implemented due to a probable exploit. After announcing that the blockchain was “under maintenance,” Binance temporarily halted all incoming and outgoing transactions.

They stated that they had temporarily disabled BSC after discovering a security hole. They had successfully isolated the problem and were looking into the security hole. The support team also added that they had faith that the community would step up and help them stop any suspicious financial transactions. They assured the customers that all the funds were completely secure.

Twitter users initially speculated that a major breach had occurred on the network, with on-chain analytics suggesting that two million BNB, the chain’s native token, had been stolen, a sum worth over $600 million.

After some time, a BNB Chain engineer updated Reddit to confirm that the exploit had occurred, saying that initial estimates put the worth of the exploit between $100 million and $110 million, with about $7 million frozen.

Although “extra BNB” were created as a result of the hack on the BSC Token Hub, BNB Chain has informed its users that their assets are secure and the issue is being investigated.

Before the official notifications were made, Twitter users conducted preliminary on-chain analyses showing that the attacker had claimed a one million BNB incentive through the token hub and deposited the remainder into the decentralized finance (DeFi) lending platform Venus Protocol.

Before the BNB Chain was halted, they used cross-chain bridges to borrow $150 million worth of stablecoins, which they then exchanged for Ether, Phantom Protocol tokens, and Polygon.

Before the bnb chain halt, attacker successfully transferred:

≈ $57M to Fantom

≈ $53M to Ethereum

≈ $400k to Polygon

The 6th of October, 2022, as tweeted by Hacken (@hackenclub).

The hacker used Stargate Protocol, another cross-chain bridge supplier, to launder another million BNB.

DeFi platform Vesper Finance’s strategy lead Zane Huffman estimated the attacker stole around $100 million from an initial hack of almost $600 million, an amount later provided by Zhao.

@jeffthedunker explained how they would process the funds. It is likely that the next steps of the attackers will be to transfer ETH back to the mainnet via the bridges and then tornado. About $45 million worth of Ethereum can be found on the mainnet, while another $20 million can be found on the bridges (Avalanche and Fantom official). They could get as much as $100 million in overcollateralized ETH loans.

Huffman also noted that the attacker has digital assets worth more than $400 million blocked on the BNB Chain, with more funds perhaps stuck in cross-chain bridges on the BNB blockchain.

Tether, a stablecoin service, has also banned the address linked to the bug.

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