Possible Insider Trade? MULT Token Soars 120% Amid Operations Halt

Onchain activities on the cross-chain router protocol Multichain strongly suggest that the platform may be experiencing some malicious activities. MULT, the native token for Multichain, has soared by over 120% despite the recent close of business activities on the platform.

What Happened to Multichain?

Multichain has severely struggled with its business activities over the past four months. In May, the project’s CEO Zhaojun He was arrested by the Chinese law authorities. With the Multichain boss being the only entity controlling the protocol’s multi-party computation (MPC) node servers, the rest of the Multichain team lacked access to users’ funds.

To regain access to users’ assets and operate normally, the Multichain team reached out to Zhaojun’s family. His sister, who gained access to Zhaojun’s account and supposedly preserved $220 million worth of funds tied to the protocol, was subsequently arrested in July by the Chinese government. 

All along, the Multichain team members noted that they had little information about Zhaojun’s arrest and lacked adequate communication. The lack of communication and sufficient funding forced the project to announce a shutdown of its business operations in mid-July. Although Multichain has made no indication on its official website that it has shut down its business, its official platforms have remained dormant to date.

Multichain’s closure affected some platforms. Fantom, for example, was one of the largest users of the Multichain bridge. However, Fantom began to see a steady decline in its total value locked (TVL) from May when Multichain’s financial crunches were revealed. Blockchain analytics platform DeFiLlama reveals that the TVL has currently dropped from over $300 million to $53 million.

Possible Insider Trade?

With Multichain’s activities closed down, a sudden increase in its native cryptocurrency’s value suggests that malicious activities are occurring within the ecosystem.

Speculators suspect the action may be insider trading, a scheme involving the trade of cryptocurrencies based on confidential information. Mutichain’s MULT token has jumped by 120% over the last 24 hours. The asset currently trades at $2.25.