Multichain's 'Mysterious Withdrawals' Smells of 'Rug Pulling' - Chainalysis

Chainalysis told Cointelegraph that it "describes it as a possible draw" based on an analysis of fake transactions and internal issues of Multichain.

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The multi-million dollar Multichain cross-chain bridge protocol exploit could have been an inside pull, according to blockchain security and analytics firm Chainalysis.

"On July 6, 2023, the Multichain cross-chain bridge protocol suffered unusually large and unauthorized withdrawals in what appears to be a hack or insider sweepstakes," the company wrote. in a July 10 blog post.

The exploit has so far resulted in the loss of over $125 million.

On July 6, @MultichainOrg experienced unusually large and unauthorized withdrawals, resulting in losses of over $125 million. This is one of the biggest #crypto hacks on record.

Read on to find out what we know so far: https://t.co/ib2K6sIrID pic.twitter.com/BBY3iU75oB

— Chainalysis (@chainalysis) July 10, 2023

However, Chainalysis believes the exploit may have resulted from compromised admin keys, which some say means it could have been an "internal work".

Blockchain security firm SlowMist also suggested the same. Source: Twitter

In a statement to Cointelegraph, a spokesperson for Chainalysis confirmed that the company "describes it as a possible coin toss".

Multichain smart contracts use a Multi-Party Computing (MPC) system, which is similar to a multi-signature wallet, the company explained.

"It is possible that the attacker took control of Multichain's MPC keys in order to achieve this exploit," Chainalysis said, adding:

"Although it is possible that these keys have...