{"id":55775,"date":"2023-07-14T18:53:56","date_gmt":"2023-07-14T18:53:56","guid":{"rendered":"https:\/\/egrowonline.com\/?p=55775"},"modified":"2023-07-14T18:53:56","modified_gmt":"2023-07-14T18:53:56","slug":"crypto-lender-geist-finance-shuts-down-permanently-over-multichain-hack","status":"publish","type":"post","link":"http:\/\/egrowonline.com\/?p=55775","title":{"rendered":"Crypto lender Geist Finance shuts down permanently over Multichain hack"},"content":{"rendered":"


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Lending protocol Geist Finance is shutting down permanently due to losses from the Multichain exploit, according to a July 14 social media post from the app\u2019s development team. Geist contracts were paused on July 6, then resumed in \u201cwithdraw and repay only\u201d mode on July 9. The latest post confirms the team does not plan to reopen lending and borrowing on Geist.<\/p>\n

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1\/2 After confirmation from Multichain that the funds will not be recovered, we are announcing that Geist will not reopen. Because Chainlink oracles are tracking the value of real USDC, USDT, WBTC or ETH, they are not aware of the real value of Multichain assets.<\/p>\n

\u2014 Geist Finance (@GeistFinance) July 14, 2023<\/a><\/p><\/blockquote>\n

Geist is a lending protocol running on the Fantom network. It had over $29 million worth of crypto assets locked in its contracts before the Multichain hack. Before the hack, Geist allowed users to borrow, lend or use bridged tokens from the Multichain platform as collateral, including bridged versions of USD Coin (USDC<\/a>), Tether (USDT<\/a>), Bitcoin (BTC<\/a>) and Ether (ETH<\/a>). It used Chainlink\u00a0oracles to track the prices of these assets to determine their collateral and loan values.<\/p>\n

According to the post, these oracles have stopped producing reliable information. They are now listing the values of the non-bridged, or \u201creal,\u201d versions of each coin, which are more than four times the value of their Multichain derivatives, as the team explained:<\/p>\n

\u201cBecause Chainlink oracles are tracking the value of real USDC, USDT, WBTC or ETH, they are not aware of the real value of Multichain assets. Those assets are currently trading at around 22% of their real value.\u201d<\/p><\/blockquote>\n

This makes it \u201cimpossible\u201d to reenable lending, as doing so would result in bad debt for holders of non-Multichain coins such as Magic Internet Money (MIM) or Fantom (FTM<\/a>), the team stated. As a result, Geist will not be able to reopen.<\/p>\n

Related: <\/strong>Circle, Tether freezes over $65M in assets transferred from Multichain<\/strong><\/a><\/em><\/p>\n

Geist Finance interface in \u201cwithdraw and repay only\u201d mode. Source: Geist Finance<\/em><\/figcaption><\/figure>\n

The team clarified it is not blaming Chainlink oracles for Geist\u2019s closure, as these oracles \u201cworked as they should.\u201d Instead, \u201cNobody is to blame except @MultichainOrg here.\u201d<\/p>\n

Blockchain analytics experts first reported the Multichain hack<\/a> on July 7. Over $100 million had been withdrawn from the Ethereum side of Multichain bridges, including those for Dogechain, Fantom and Moonriver. The Multichain team called the transactions \u201cabnormal\u201d and warned users to stop using the protocol. However, the team stopped short of calling it a hack or exploit.<\/p>\n

On July 11, on-chain sleuth and Twitter user Spreek reported that an unknown individual was draining funds from the protocol<\/a> and sending them to fresh wallet addresses using a fee-based exploit. <\/p>\n

On July 14, the Multichain team confirmed that the withdrawals from July 7 had been the result of a hack<\/a>. The network had been storing all shards of its private keys in a \u201ccloud server account\u201d under the sole control of the team\u2019s CEO, who was arrested by Chinese authorities. This cloud server account was later accessed by someone and used to drain funds from the protocol. The team previously stated<\/a> in the protocol\u2019s documents that no single server had access to all of the shards of a key.<\/p>\n

According to the July 14 post, the July 11 fee-based attack was a counter-exploit initiated by the CEO\u2019s sister at the behest of the Multichain team in an attempt to recover funds. The sister was later arrested, and the status of the assets she recovered is \u201cuncertain.\u201d<\/p>\n<\/div>\n


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Lending protocol Geist Finance is shutting down permanently due to losses from the Multichain exploit, according to a July 14 social media post from the app\u2019s development team. Geist contracts were paused on July 6, then resumed in \u201cwithdraw and repay only\u201d mode on July 9. The latest post confirms the team does not plan […]<\/p>\n","protected":false},"author":1,"featured_media":55776,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[41],"tags":[62,28,16476,517,3056,4032,16477,3132],"class_list":["post-55775","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ethereum","tag-crypto","tag-finance","tag-geist","tag-hack","tag-lender","tag-multichain","tag-permanently","tag-shuts"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"http:\/\/egrowonline.com\/wp-content\/uploads\/2023\/07\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjMtMDcvOWJlMGFkMDItZTg2Ni00YjYyLWI3M2EtZDA5MjMxNDMyMGFkLmpwZw.jpg","_links":{"self":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/55775","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=55775"}],"version-history":[{"count":1,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/55775\/revisions"}],"predecessor-version":[{"id":55777,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/55775\/revisions\/55777"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/media\/55776"}],"wp:attachment":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=55775"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=55775"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=55775"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}