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Centralized crypto exchange Gate.io has threatened legal action in response to rumors of impending bankruptcy. Members of the crypto community have been speculating since May about a possible connection between Gate.io and troubled cross-chain protocol MultiChain.
“Legal proceedings will be initiated against those creating panic among investors by mere rumors and gossip without relying on any concrete source.” reads The June 4 Twitter announcement was originally written in Turkish.
You were the Vice Chancellor.
Sehte and Gareklik have paid off all types of loans. pic.twitter.com/6SpuKx0rU8— Gate.io (@gate_io) June 4, 2023
Rumors of Gate.io going bankrupt surfaced after a series of events involving MultiChain. The cross-chain protocol has been experiencing technical difficulties since May 24 when a node problem delayed transactions. A few days later, Multichain’s team revealed that it could not contact its CEO to access the servers and resolve the problem, fueling previous rumors that the protocol’s leadership had been arrested and executed by Chinese authorities. Over $1.5 billion in contract funds was forfeited.
Data from blockchain analytics firm Arkham Intelligence on May 24 Has shown Massive flow of Multichain Tokens (MULTI) from Gate.io’s platform.
Gate.io first denied liquidity issues on May 31, claiming that its operations were “running healthy” and that withdrawals were not a problem. While Twitter and Telegram channels are abuzz with news of traders withdrawing funds, the trading volume of the exchange To appear To be relatively stable in the past days.
At the time of writing, its native token GetToken (GT) is trading at $4.29, down 9.6% over the past seven days. shows Data from CoinGecko. First established in the Cayman Islands in 2013, the exchange recently expanded to Hong Kong, Turkey and Dubai.
Multichain’s ongoing issues prompted other crypto exchanges to take action. Binance suspended deposits for 10 bridged tokens on the BNB Smart Chain, Phantom, Ethereum, and Avalanche blockchain networks on May 25. Transaction downtime led the Phantom Foundation to remove 449,740 MULTI ($2.4 million) from liquidity on decentralized exchange SushiSwap.
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