Centralized 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 the struggling protocol Multichain.
“Legal proceedings will be initiated against persons who cause panic among investors only with rumors and gossip, without relying on any concrete sources,” says a June 4 announcement on Twitter originally written in Turkish.
Tüm kullanÄ±cÄ±larÄ±mÄ±zÄ±n bilgisine arz ederiz.
Sahte ve gerçeklik payÄ± olmayan söylentilere lütfen itibar etmeyiniz. pic.twitter.com/6SpuKx0rU8
—Gate.io (@gate_io) June 4, 2023
The Gate.io insolvency rumor arose after a series of events involving Multichain. The cross-chain protocol has been experiencing technical difficulties since May 24, when a problem in one node delayed transactions. A few days later, the Multichain team revealed that they were unable to contact their CEO to access the servers and resolve the issue, fueling earlier rumors that the protocol leadership had been arrested and more than $1.5 billion. in smart contract funds seized by Chinese authorities.
Data from Blockchain analytics firm Arkham Intelligence as of May 24 showed large deposits of the Multichain (MULTI) token from the Gate.io platform.
Gate.io first denied liquidity problems on May 31, stating that its operations were “working well” and that withdrawals were not an issue. Although the Twitter and Telegram channels have been inundated with news of withdrawals, the trading volume of the exchange seems have remained relatively stable in recent days.
At press time, its native GateToken (GT) token is trading at $4.29, down 9.6% over the past seven days, according to CoinGecko data. Founded in 2013 in the Cayman Islands, the exchange has recently expanded to Hong Kong, Turkey, and Dubai.
Multichain’s ongoing problems prompted other cryptocurrency exchanges to take action. Binance suspended deposits of 10 bridge tokens on the BNB Smart Chain, Fantom, Ethereum, and Avalanche networks on May 25. The transaction downtime also prompted the Fantom Foundation to withdraw 449,740 MULTI ($2.4 million) of liquidity on the decentralized exchange, SushiSwap.
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