- The circumstances surrounding Multichain sparked rumors that Gate.io was going bankrupt.
- On May 31st, Gate.io first denied any liquidity concerns.
After hearing reports of insolvency, centralized cryptocurrency exchange Gate.io has threatened legal action. Since May, members of the crypto community have speculated that the problematic cross-chain protocol Multichain may be related to Gate.io.
The exchange tweeted in Turkish (translated):
“Legal proceedings will be initiated against people who cause panic among investors only with rumors and gossip, without relying on any concrete source.”
Significant Multichain Impact
The circumstances surrounding Multichain sparked rumors that Gate.io was going bankrupt. Since a node problem slowed transactions on May 24, technical issues have plagued the cross-chain protocol.
Rumors that the protocol’s leadership had been jailed and more than $1.5 billion in smart contract money had been confiscated by Chinese authorities were given new life when the Multichain team said a few days later that it couldn’t reach its CEO to access the servers and rectify the issue.
Large amounts of Multichain tokens (MULTI) were transferred to and from Gate.io’s network on May 24, according to data compiled by Blockchain analytics company Arkham Intelligence.
On May 31st, Gate.io first denied any liquidity concerns, saying operations were “running healthy” and withdrawals were not a problem. Despite several reports of traders withdrawing cash across Twitter and Telegram channels, the exchange’s trading volume has remained reasonably stable over the previous few days.
CoinGecko reports that the price of its native token, GateToken (GT), has fallen 9.6 percent in the previous week, to $4.29. The exchange, which began in the Cayman Islands in 2013, has now spread to Hong Kong, Turkey, and Dubai.
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