Binance lays off 1,000 workers as multichain saga cracks down on users: Asia Express

Decentralized Web3 cross-chain router reportedly under one person’s control

Imagine a system where all your money is controlled by one man and his family and when there is any cause for concern, the propaganda machine immediately goes ‘brrr’ to pretend that some dangerous withdrawals have been made. Everything is fine though. Does it sound more like a one party state? No, welcome to blockchain, specifically multichain.

On July 14, Chinese decentralized cross-chain bridge protocol Multichain announced it would cease operations after three years. the reason? The only person who allegedly held the private keys to more than $1.5 billion in users’ crypto stored on MultiChain was its co-founder and CEO Zhao Jun and later, his sister (name unknown). Both were arrested by Chinese police – but it is still unclear why.

Zhao Jun was allegedly arrested as early as May 21, but it appears Multichain staff didn’t want you to know… until now, when one discrepancy after another obscured the truth. was made impossible.

The whole process began on or around May 24, when MultiChain users reported that the funds had not arrived for about 72 hours after they were sent. The admins quickly responded that the delay was due to the backend node upgrade “taking longer than expected,” and that “all affected transactions will come to fruition once the upgrade is complete.”

“Most routes are operating normally, as some routes (Kava, zkSync, Polygon zkEVM) are temporarily suspended. All affected transactions will come after the upgrade is complete. We sincerely apologize for the inconvenience caused to us.

At that time, some users were already Aware CEO Zhao Jun arrested by Chinese police. In response, co-founder Alfred Xu decided to take steps to debunk “rumours” and protect users from “disinformation”, writing in the protocol’s Chinese Telegram channel: “All team members are currently safe and sound.” Main operations are running normally.”

Despite the assurances, concerns turned to full-blown panic on 25 May when local news outlet PANNewsLab reported that the CEO could not be contacted. This time, it was fellow co-founder DJ Qian who stepped in and Gave Assurance that “user assets and employees are protected.” However, Qian also confirms Zhao Jun’s disappearance. By the next month, Multichain continued promote Its cross-chain protocol.

Fast forward to July 7th, users began reporting over $100 million in unauthorized withdrawals of funds from Multichain’s phantom ethereum bridge as well as other sidechains. Nearly $65 million in Tether (USDT) and USD Coin (USDC) were frozen by their issuers, Tether and Circle, after the transaction sparked widespread fears that the multichain was hacked. Some security experts started it suspect That hack could be an inside job.

According to Multichain:

“User assets locked at MPC address were abnormally transferred to an unknown address. Login information from an IP address in Kunming was found on the cloud server platform, as well as a series of operations that transferred funds from the MPC address.

The developers wrote that on July 9, Zhao Jun’s sister moved the remaining assets from the router pool to a wallet address she controlled as an “asset protection action.” Four days later, Zhao Jun’s sister was reportedly arrested by the police (again it is unclear why she was arrested). Because Zhao Jun and his sister were the only ones who had access to operating funds, users’ assets, multichain servers, and even its website (which its own team is trying to shut down),” since the beginning Yes”, the project’s own development team could do that. no longer works.

“Subsequently, the team established contact with Zhaojun’s family and learned that all of Zhaojun’s computers, phones, hardware wallets and memorabilia were confiscated by the authorities.”

Unfortunately, the worst may yet be yet to come for users of MultiChain…

To this day, we don’t really know why Zhao Jun was arrested, what he was charged with, or any details about his case (and no, I don’t think Multichain will tell us). However, under Chinese law, funds seized as part of a criminal investigation can be considered proceeds of crime, opening the way for possible confiscation by the state. In that case, it would be an absolute tragedy, unlike multichain’s decision to leave all its keys and access in the hands of one (or two) person.

Binance’s Unusual Anniversary Gift to Employees: Unemployment

On the sixth anniversary of the founding of the crypto exchange, Binance decided to give gifts to some of its employees to celebrate the occasion. However, most recipients wished they had never opened it.

On July 14, Changpeng Zhao (CZ), the CEO of Binance, inaugurated the 6th anniversary event. They said, “We will always do what we believe is in the best interests of users. We will continue to cooperate with regulators. We will also defend what we believe is right for the way forward. The same day, The Wall Street Journal (WSJ) reported that the exchange had reduced its workforce by up to 1,000 in recent weeks, compared to a total of 8,000 before the layoffs.

According to employees, the layoffs were focused on the global and customer service areas, with the ongoing restructuring likely to cut up to a third of its total workforce. The WSJ labeled the ongoing investigation by the US Department of Justice as the “most enduring” challenge facing the exchange.

In response, CZ wrote,

“As we continually strive to increase talent density, involuntary terminations do happen. This happens in every company. The figures reported by the media are absolutely wrong. 4 FUD.”

The blockchain executive said that despite the layoffs, Binance is “still hiring.” The exchange is currently on its website lists There were 96 positions available at the time of publication.

On July 17, the WSJ issued a follow-up report claiming that the exchange had closed its doors for items such as mobile phones, fitness, and working from home, citing the “current market environment and regulatory environment” and the need to cut expenses. Employees’ compensation has stopped. Binance is currently in litigation with both the US Securities and Exchange Commission and the US Commodities and Futures Trading Commission on charges of offering unregistered securities and operating an unregistered exchange in the US.

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Zhiyuan Sun

Zhiyuan Sun is a reporter at Cointelegraph who focuses on technology-related news. He has many years of experience writing for major financial media outlets such as The Motley Fool, Nasdaq.com and Seeking Alpha.