Circle and Tether Freeze $65 Mln Amid Multichain Hack

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Key Takeaways

  •  Circle froze $27.65 million, $30.1 million, and $5.5 million in three separate transactions. 
  • The multichain breach led to the withdrawal of over $125 million worth of cryptocurrencies.

Stablecoin issuers Circle and Tether have taken action in response to the recent exploit of the cross-chain router protocol Multichain. The exploit resulted in the loss of over $126 million worth of various tokens, prompting Circle and Tether to freeze more than $65 million in associated assets. 

On July 7, Etherscan data revealed that Circle froze $27.65 million, $30.1 million, and $5.5 million in three separate transactions. These measures were taken to protect the assets and thwart the hacker’s cash-out efforts. The exploit itself involved the unauthorized access of Multichain’s Multi-Party Computation (MPC) address, where funds locked between blockchains are stored.

The hacker withdrew the funds and transferred them to an externally controlled wallet, impacting the Fantom Bridge and resulting in the theft of various cryptocurrencies, including wBTC, USDC, and USDT.

The security firm Peckshield was the first to detect unusual transfers totaling over $118 million from Multichain’s Fantom and Moonriver bridges. Furthermore, 0xScope, a knowledge graph protocol, identified three addresses that received at least $63.2 million in USD Coin (USDC) from Multichain, all of which have now been frozen.

Etherscan also flagged two addresses as “Multichain Suspicious Addresses,” from which more than $2.5 million in Tether (USDT) was frozen, according to a report from the Fantom Foundation.

Multiple wallets were affected by the incident on July 6, resulting in the withdrawal of over $125 million worth of cryptocurrencies. The Multichain’s Fantom bridge experienced adverse effects, along with ecosystems such as Dogechain, Moonriver, Kava, and Conflux. The cause of these abnormal asset transfers remains unclear, and investigations are currently ongoing to determine the details surrounding the exploit.

Multichain announced the suspension of its services on Twitter without specifying a timeline for their return. It further cautioned users against utilizing the Multichain bridging service and explained that all bridge transactions would be stuck on the source chains until further notice.

Hacks in the crypto space similar to that of Multichain are becoming increasingly common in recent months. In 2022 alone, more than $2 billion in assets was stolen from token bridge exploits.

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Saniya Raahath
Saniya Raahath

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