Crypto enthusiasts and traders have been abuzz lately after rumors that the Gate.io crypto exchange might be imminently facing bankruptcy. Speculation had centered around the struggling cross-chain protocol Multichain, and the actions taken by crypto exchanges in response to the protocol’s technical difficulties. Gate.io denied the rumors on Twitter and warned of legal action against those spreading baseless claims.
Link between Gate.io and Multichain after Large Inflows of Multichain Tokens
Gate.io is a centralized crypto exchange founded in 2013. It has expanded to Hong Kong, Turkey, and Dubai. Since May 24, Gate.io has been linked with Multichain after large inflows of Multichain tokens were reported. Investors became concerned when Multichain’s team later revealed that they were unable to contact the CEO and access the servers to address the issue. Moreover, the circumstances ignited speculation that Chinese authorities had arrested the protocol’s leadership and seized over $1.5 billion in smart contract funds.
Binance suspended deposits for 10 tokens across multiple networks after learning about the Gate.io and Multichain connection. This downtime also led the Fantom Foundation to remove 449,740 MULTI ($2.4 million) from liquidity on the decentralized exchange SushiSwap.
Crypto Exchange Denies Link to Multichain Issues and Promises User Campaigns
GateToken (GT) fell approximately 9.6% in the past week, according to CoinGecko data at the time of writing. Gate.io spokesperson denied any link to the ongoing debacle and promised upcoming user campaigns for the platform’s anniversary. The crypto exchange denies rumors of connection to Multichain issues, assures unaffected operations, and prioritizes anniversary celebration and platform launch.
Gate.io plans legal action against individuals who caused panic among investors, violating laws and causing significant losses. Lookonchain, an analytics firm, published an updated view of the assets held on Gate.io’s platform to demonstrate liquidity. According to the data, six separate wallets hold a total of $1.44B in assets – including 97M in GateTokens ($434M); 149,648 ETH ($279M); 182M USDT; 2,612 BTC ($70M); and 6T SHIB ($52M).
However, only time will reveal if Gate.io and Multichain can effectively handle the crisis to protect investors and maintain operations. The exchange is taking steps to protect its interests and investors by distancing itself from the matter.
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