Circle intervenes, seizes $63 million from Multichain hack

Circle, the official issuer of USDC, the second largest stablecoin by circulating supply, has withheld $63 million from a multichain hack. Etherscan data compiled on July 7th shows The stablecoin issuer froze $27.65 million, $30.1 million and $5.5 million in three transactions, hampering the hacker’s cash-out attempts.

Multichain hacked, Circle intervenes

Multichain, a cross-chain protocol router, was hacked on July 7, resulting in the loss of over $126 million worth of various tokens. The exploit occurred when the attacker illegally accessed Multi-Party Computation (MPC) addresses of MultiChain, which stores funds locked between blockchains.

Thereafter, the hacker withdrew funds from the address and transferred them to an externally controlled wallet. Phantom Bridge was adversely affected by this outflow as the hacker withdrew various coins including WBTC, USDC and USDT. There were also a few other altcoins that were stolen by the hacker.

Funds were also siphoned from Moonriver Bridge, with observers noting that at least $6.8 million worth of various coins, including USDC, were moved to an external address. It has also been reported that one address associated with MultiChain that connects to Dogecoin also lost over $600,000.

The stolen USDC is now frozen and cannot be moved, which is a relief to the community. However, it is unclear whether Circle will reverse fund MultiChain. In the past, Tether Holdings and Circle, the centralized issuers of the world’s most liquid stablecoins, have intervened to prevent bad actors from siphoning off cash.

Hack Compounding Multichain’s Difficulties, Bitcoin Firm

PeckShield, a blockchain security firm, was the first To drag out Unusual transfer of assets worth over $118 million from Multichain’s Phantom and Moonriver Bridge. The company tagged the team behind the cross-chain protocol, who immediately took action.

In response to Hack, Multichain Said The outflow was “abnormal” and halted all activity, recommending users to halt their protocols and cancel all contract approvals.

Although the Multichain team assured the community that the private keys that control asset movements through the bridge are secure and stored on-chain, there are flaws in their technology that resulted in the hack. The hack reflects that the past few weeks have been tumultuous. In addition to delayed transactions and what the team described as “multiple issues,” the founder is missing.

Despite the attack, bitcoin prices are stable at the time of writing. The coin is above the psychological support of $30,000, rejecting bearish pressure since July 6. However, Fantom’s native currency, FTM, is in a free fall, down 20% from July highs.

Feature image from Canva, chart from TradingView