Gate.io Denies Liquidity Problems After Multichain CEO Disappears

Centralized crypto exchange Gate.io denied rumors of illiteracy on May 31. They said that “there is no problem with our operations or evacuations as rumored.” The statement comes after several Twitter channels alleged that the exchange was facing bankruptcy due to alleged links between it and the cross-chain router protocol MultiChain (MULTI).

The Gate.io team said that the company is “running well” and is focused on setting up an affiliate trading platform called Gate.HK in Hong Kong.

Rumors of Gate.io’s bankruptcy arose after a series of events related to MultiChain. Blockchain analytics firm Arkham Intelligence on May 24 Posted Data showing a large inflow of Multi into Gate.io, which Arkham said was related to rumors of the protocol’s team being “allegedly arrested in Shanghai”.

after rumors of @MultichainOrg team is reportedly being arrested in Shanghai, some big holders $multi Fund transfer has started.

Team wallets running ~$3M $multi To has scared off some investors as well $multi The price is down 26.5% in 24 hours. pic.twitter.com/p2sQpu9Ass

— Arkham (@ArkhamIntel) May 24, 2023

On May 25, Binance suspended deposits for several bridged tokens that rely on the Multichain protocol, including Polkastarter (POLS), Alpaca Finance (ALPACA), and bridged versions of Phantom (FTM). Binance said these tokens were experiencing delayed transactions and temporarily halted deposits, seeking clarity from Multichain.

On May 31, MultiChain posted a statement that its CEO was missing, adding that some of the protocol’s routers no longer functioned because only the CEO had access to the relevant servers. On the same day, some Twitter users started posting images of transactions that purported to be large deposits of FTM on Get.io from members of the MultiChain team.

() in bus:

there are rumors that The team is arrested. sent multichain team $10 million in USD $FTM, Is this a massive ongoing issue? pic.twitter.com/1XXbwGMoPs

— CoinSumption (@CoinSumption) May 31, 2023

blockchain data confirm that that over $10 million in FTM was transferred to Gate.io from an unknown user on May 25-26. Cointelegraph was not able to determine the identity of the account owner who made the transaction.

Connected: Gate Group Launches New Virtual Asset Trading Platform in Hong Kong

After seeing multiple deposits from MULTI and Fantom to Gate.io, some Twitter users suspected that the exchange was exposed to pullbacks from Multichain.

The Gate.io team has denied these rumors, stating that the exchange is processing all withdrawals and operating normally.