Centralized crypto exchange Gate.io denied rumors of illiquidity on May 31, stating that “there are no issues with our operations or withdrawals like the rumors.” The statement comes after several Twitter channels claimed that the exchange was bankrupt due to an alleged connection between the exchange and the cross-chain router protocol MultiChain (MULTI).
The Gate.io team said that the company’s “business is healthy” and it aims to establish an affiliate trading platform in Hong Kong called Gate.HK.
Rumors of Gate.io’s bankruptcy spread after a series of events related to MultiChain. Blockchain analytics firm Arkham Intelligence on May 24 Posted Data from MULTI showing a large influx into Gate.io, which Arkham linked to rumors that Protocol’s team was “allegedly arrested in Shanghai.”
— Arkham (@ArkhamIntel) May 24, 2023
On May 25, Binance suspended deposits for several bridged tokens that rely on the Multichain protocol, including Polkastarter (POLS), Alpaca Finance (ALPACA), and bridged versions of Phantom (FTM). Binance said these tokens were experiencing delayed transactions and temporarily halted deposits as they sought clarity from Multichain.
On May 31, Multichain posted a statement that the CEO was missing, adding that some of the protocol’s routers stopped working because only the CEO had access to the relevant servers. That same day, some Twitter users began posting images of transactions purportedly from members of the MultiChain team at Gate.
 in bus:
There are rumors that the https://t.co/5YQLO0SsVt team has been arrested. The Multichain team https://t.co/5YQLO0SsVt sent $10 million USD $FTM, Is this a growing problem? ☠️ https://t.co/s29KYytChM pic.twitter.com/1XXbwGMoPs
— CoinSumption (@CoinSumption) May 31, 2023
Blockchain data confirms that over $10 million in FTM was transferred from an unknown user to Gate.io on May 25 and 26. Cointelegraph was unable to identify the account holder who made the transaction.
Connected: Gate Group launches new virtual asset trading platform in Hong Kong
After seeing multiple deposits from MULTI and Fantom to Gate.io, some Twitter users suspected the exchange was exposed to the Multichain fallout.
The Gate.io team has denied these rumors, stating that the exchange is processing all withdrawals and operating normally.
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