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Last week, the price of the Multichain token crashed by about 20% due to reports of withdrawals going awry. The exact reason for transactions in the Multichain token getting stuck is still unknown, although there are two theories.
Possible Legal Trouble
At first, deposits and withdrawals of MULTI were believed to be stuck due to a poorly executed system update that took far longer than usual. However, rumors that the dev team had, in fact, been arrested in Shanghai started to spread like wildfire shortly after.
These speculations remain unconfirmed. However, it has since been confirmed by the Multichain team that the CEO has gone missing, leaving the devs without the access needed to perform server maintenance, which could explain the downtime.
Following rumours of the @MultichainOrg team being allegedly arrested in Shanghai, some large holders of $MULTI have began moving funds.
Team wallets moving ~$3M of $MULTI to https://t.co/5ecSG3rKek have also spooked some investors, with $MULTI price falling 26.5% in 24h. 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, spreading concerns that the two platforms are linked.
Over the past week, even more assets allegedly belonging to members of the Multichain team have been transferred to Gate.io – most notably via a series of transactions adding up to about $10 million worth of Fantom.
[🍽] JUST IN:
There are rumors that the https://t.co/5YQLO0SsVt team has been arrested. The Multichain team has sent https://t.co/5YQLO0SsVt $10M USD in $FTM. Is this an ongoing larger-scale issue? 🦢🏴☠️ https://t.co/s29KYytChM 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 began to fly, singling out Gate.io for allegedly running cover for the Multichain team, whom they are allegedly connected to.
Gate.io Dismisses Rumours
In order to calm the waters, the team at Gate.io published a statement, seen by Bloomberg, denying their involvement in the matter and clarifying what they’ve been up to lately.
According to the spokesperson for Gate.io, employees of the platform are more preoccupied with the 10-year anniversary of the platform they run and with the paperwork – most notably a Virtual Asset Service Provider (VASP) license – necessary for the launch of their new Hong Kong focused trading platform.
“Recently, there have been rumors circulating regarding Gate.io. We would like to clarify that our operations are running healthily, withdrawals are functioning properly, and there are no issues with our operations or withdrawals, as rumored. The Gate.io team is currently focusing on our 10th-anniversary celebration and the launch of Gate Group’s Hong Kong trading platform, Gate.HK.”
The spokesperson for Gate.io 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 birthday.
Following the controversy, the analytics platform Lookonchain decided to publish an updated view of assets stored on Gate.io’s platform.
Due to the drop in GateToken price and bankruptcy rumors, we updated the assets of @gate_io.
6 wallets hold a total of $1.44B in assets.
Including:
97M $GT($434M)→ 30%
149,648 $ETH($279M)→ 19%
182M $USDT→ 13%
2,612 $BTC($70M)→ 5%
6T $SHIB($52M)→ 4%
…Hope it helps you. pic.twitter.com/QkXgidvuBn
— Lookonchain (@lookonchain) June 1, 2023