Last week, the price of the Multichain token crashed around 20% due to reports of withdrawals gone wrong. The exact reason for the blocking of transactions in the multi-chain token is still unknown, although there are two theories.
Possible legal problem
At first, it was thought that deposits and withdrawals from MULTI were blocked due to a poorly executed system update that was taking much longer than usual. However, rumors that the development team had in fact been arrested in Shanghai began to spread like wildfire soon after.
These speculations remain unconfirmed. However, it has since been confirmed by the Multichain team that the CEO is gone. missingleaving developers without the access needed to perform server maintenance, which could explain the downtime.
Following rumors of @MultichainOrg team would have been arrested in Shanghai, some big holders of $MULTI began to transfer funds.
Team Portfolios Moving ~$3 Million From $MULTI For also spooked some investors, with $MULTI price down 26.5% in 24 hours. pic.twitter.com/p2sQpu9Ass
— Arkham (@ArkhamIntel) May 24, 2023
At the time, an unknown user sent $2.75 million worth of MULTI to Gate.io, raising concerns that the two platforms were linked.
Over the past week, even more assets allegedly belonging to members of the Multichain team have been transferred to Gate.io – including via a series of transactions adding up to around $10 million from Fantom.
(🍽) JUST IN:
There are rumors that the team was stopped. The Multichain team sent 10 million US dollars in $FTM. Is this a persistent problem on a larger scale? 🦢🏴☠️ pic.twitter.com/1XXbwGMoPs
— CoinSumption (@CoinSumption) May 31, 2023
Although, at this point, we can safely say that the Multichain team is probably in a bit of a pickle, wild accusations started flying pointing to Gate.io for allegedly covering up the Multichain team, to which they would be linked.
Gate.io dismisses rumors
In order to calm the waters, the Gate.io team released a statement, seen by Bloomberg, denying their involvement in the case and clarifying what they have been up to recently.
According to the Gate.io spokesperson, platform employees are most concerned about the 10th anniversary of the platform they run and paperwork – including a virtual asset service provider license ( VASP) – needed to launch their new Hong Kong-focused trading platform.
“Recently there have been rumors about Gate.io. We would like to make it clear that our operations are running smoothly, withdrawals are working properly and there are no issues with our operations or withdrawals as the rumor has it. The Gate.io team is currently focused on celebrating our 10th anniversary and launching Gate Group’s Hong Kong trading platform, Gate.HK.
The Gate.io spokesperson also took the opportunity to tease some upcoming goodies for the Gate community – including a series of “user campaigns” to celebrate the platform’s 10th anniversary.
Following the controversy, the analysis platform Lookonchain decided to publish an updated view of the assets stored on the Gate.io platform.
Due to the drop in GateToken price and rumors of bankruptcy, we have updated the assets of @gate_io.
6 portfolios hold a total of $1.44 billion in assets.
Including:
97M $GT($434M)→ 30%
149,648 $ETH($279M)→ 19%
$182MUSDT→ 13%
2,612 $BTC($70M) → 5%
6T $SHIB($52M) → 4%
…Hope this helps you. pic.twitter.com/QkXgidvuBn
— Lookonchain (@lookonchain) June 1, 2023
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