After suffering considerable losses as a result of the Multichain breach, lending site Geist Finance has made the painful decision to permanently close down. Before the hack, the lending system had approximately $29 million in crypto assets trapped in its contracts. The Fantom Network created this loan protocol.
Geist Finance temporarily halted its contracts on July 6 as a precaution. On July 9, the team authorized users to withdraw and return monies. Nonetheless, the most recent declaration affirms that loan and borrowing services would be discontinued.
Geist Finance’s dependence on Chainlink oracles, which were in charge of tracking the values of various tokens, was jeopardized as a result of the attack. USD Coin (USDC), Tether (USDT), Bitcoin (BTC), and Ether (ETH) are some examples of tokens being tracked by the company. These oracles began providing erroneous values for Multichain assets, which were being traded at a price that was higher than their actual worth.
As a consequence, Geist Finance encountered severe difficulties in calculating the correct collateral and loan values for its users.
Geist Finance wishes to emphasize that closing is not the result of any failures on the component of Chainlink oracles. Instead, the group blames Multichain entirely for the attack and the consequent losses. Over $100 million was withdrawn from Multichain Bridges as a result of the theft, which was first revealed by blockchain analytics experts.
On July 14, the Multichain team verified the hack. The network’s private key shards were discovered to be kept in a cloud server account under the CEO’s sole authority. Following that, Chinese authorities arrested the CEO. This facilitated fraudulent access to the account and the draining of funds.