- Zhaojun He, Multichain’s CEO, reappeared on Telegram after being detained by Chinese authorities for an extended period of time, leaving Multichain users and investors seeking answers.
- On January 16, 2024, His Telegram status changed from “last seen a long time ago” to “last seen recently,” implying potential user activity and sparking speculation.
- During He’s detention, Multichain users’ assets were mysteriously bridged to unknown addresses without their consent.
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Co-founder and CEO of Multichain, a cross-chain bridging protocol, Zhaojun He has made a surprise appearance on Telegram following an extended period of inexplicable detention by Chinese authorities starting in 2023. Due to this development, Multichain users and investors are looking for answers and clarification regarding their assets, which were surreptitiously and uninvitedly bridged to unidentified addresses while He was being detained.
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Users noticed a big change to Zhaojun He’s Telegram profile on January 16, 2024. There was some user activity evident when his status changed from “last seen a long time ago” to “last seen recently.” While some users are hopeful that He may have regained access to his phone as a result of this development, others are cautious and believe that the police may still be involved in accessing his Telegram account to stop messages from being automatically deleted.
Concerns from investors and Multichain’s problems
The experience with Zhaojun He started when he was taken into custody by Chinese authorities on May 21, 2023, for unknown reasons. The users of Multichain were greatly impacted by his detention because he was the CEO and had centralized access to the company’s servers and assets. Investors were alarmed and perplexed when numerous users’ assets on Multichain were bridged to unidentified locations and removed without their permission during this period.
One of the biggest users and victims of the Multichain incident, Andre Cronje, co-founder of the Fantom protocol, provided some insight into the matter. Cronje clarified that the stolen funds were traced to Multichain by the local Chinese police as part of a larger scam investigation. Although Multichain was not involved in the scam directly, the protocol had “held” the stolen money. As part of the ongoing investigation, the police were able to seize the assets after most node operators were arrested and forced to give up their access and keys.
In reaction to these events, Fantom has started working to retrieve the stolen assets. To get the money back, they are working with law firms in Singapore, the country where Multichain was founded. However, because of their limited ability to act on behalf of all affected users, their efforts have run into difficulties within mainland China.
“With anything regulatory, legal, or based around a criminal investigation, these things often take years to resolve,” said Cronje, recognizing the complexity of the situation. Investors in Multichain are now uneasy and there is no clear way to get out of this unpleasant situation.
China’s offensive against blockchain and web 3
The dramatic events taking place are set against the backdrop of China’s severe crackdown on Web3 and blockchain companies doing business there. Since the start of 2023, Chinese authorities have taken severe action against these organizations, particularly in light of the nation’s official ban on cryptocurrencies. When these rules are broken, assets are seized and defendants are given the presumption of guilt until proven innocent.
Foreign investors who used Chinese blockchain protocols without intending to commit crimes have suffered collateral damage as a result of these actions, even though they have decreased money laundering operations and cryptocurrency scams. The Multichain incident serves as a clear illustration of the difficulties foreign companies encounter in this stringent regulatory framework.
Investor skepticism continues
Investors and users of Multichain are still unsure as Zhaojun’s reappearance on Telegram continues to spark rumors and questions. The Multichain community is feeling uneasy due to the CEO’s extended absence and the unexplained bridging of assets. Fantom’s attempts to retrieve the embezzled assets are beset by legal complications and a protracted resolution procedure, which provides investors with few instant answers.
Even though the world of cryptocurrencies and blockchain technology is still developing quickly, this event emphasizes how crucial security and regulatory compliance are to both users and investors. Awaiting any developments that could reveal on and put an end to this currently underway narrative, stakeholders will be closely watching the events surrounding Multichain and Zhaojun He.
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