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“Multichain was a big hit,” says Andre Cronje as Phantom’s TVL crashes

André CronjeCo-founder of the phantom network, part of the recent Multichain debacle “hard blow” for smart contract platformexperiencing a sharp decline in activity in recent weeks.

Second DefiLlama’s data, locked total value (TVL) The Phantom rate, which exceeded $364 million in early May, dropped to nearly $70 million on July 14.. Phantom’s TVL reached $7.5 billion in 2022 at its peak. in the same period price local token Phantom (FTM extension), fell from $0.41 to $0.28.

“Multichain was a big hit”, He wrote In a thread on the Phantom forum, Cronje adds: “He had a lot of guarantees from the team. [di Multichain] server deployment, access and distribution of geolocation”. “Don’t trust, check (I tell myself)”said Cronje.

TVL of Phantom between May and July 2023. Source: DefiLlama

Cronje’s comments follow Multichain’s July 14 announcement, which closed operations He is the only one controlling the platform’s servers after its CEO was arrested in May.

With arrested leadership and increasing technical challenges, July 6 Multichain exploitedon $125 million cryptocurrency withdrawn from different walletshitting the Ethereum side of the Phantom, Moonriver, and Dogechain bridges. Withdrawals represented the majority of funds held on each bridge.

As Cointelegraph reports, Multichain hid all parts of its private keys inside “cloud server accounts” It is under the exclusive control of its CEO. Afterwards, This account was used by someone to withdraw money from the protocol.

The consequences of multichain problems also affected the lending protocol. GeistFinance, forced to close permanently due to losses due to abuse. Before the hack, Over $29M in crypto assets locked in contracts executed at Fantom. This is why the shutdown of Geist had a huge impact on Phantom’s TVL.

In response to abuse, Circle and Ropestablecoin issuers, frozen more than $65 million in assets linked to the attack. Phantom works with both companies for local regulation and explores aggregations for local bridge infrastructure. “At this point, we are exploring all options, working with relevant organizations to recover assets”said Cronje.

Translation of Matteo Carrone

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