Fantom-based credit protocol announces closure due to Multichain incident
Date: 2023-07-16 Author: Karina Ziganova Categories: BUSINESS
. The developers of the protocol stated that it was impossible to save the project due to the lack of chances to return the funds lost due to the fault of Multichain.
Geist Finance's crypto lending protocol is shutting down. This was announced by the developers of the project on the Geist page on Twitter. Representatives of the protocol said that they would not be able to return the funds lost as a result of the incident around the Multichain cross-chain router. Exactly how much they lost at Geist Finance is unclear.
"There is no one to blame for this situation except Multichain," the project noted.
Against the background of the news, the rate of the GEIST token collapsed by 70% to $0.00047.
The Geist Finance protocol was launched in October 2021 based on the Fantom network. The project offered decentralized lending services, relying on the provision of tokenized versions of USDC and other Multichain-based derivatives. Now, these derivatives have collapsed in price, making it impossible for Geist to resume.
According to DeFiLlama, Geist Finance has less than $1.3 million of client capital left. For comparison, in October 2021, this figure exceeded $3.5 billion
Earlier, the developers of Multichain announced the suspension of work. According to them, Chinese law enforcement agencies arrested the general director of the project, Zhao Jun, who is suspected of stealing the project's assets. The scale of the incident exceeds hundreds of millions of dollars. Blockchain firm Chainalysis reported that during the arrest of the head of Multichain, Chinese authorities confiscated $1.5 billion worth of cryptocurrency.
The version of fraud on the part of Zhao Jun was previously confirmed by the CEO of the Fantom blockchain platform, Michael Kong. He noted that the transfer of funds from Multichain wallets does not look like a regular hack, since the cryptocurrency was not withdrawn to third-party wallets or mixers to obfuscate surveillance.
