Decentralized crypto exchange Gate.io has denied rumors of its insolvency problems, which Twitter users have linked to the crisis on the Multichain platform.
The Gate.io team stated that “the company’s operations are going well” and that all forces are now focused on creating a subsidiary trading platform in Hong Kong called Gate.HK.
The announcement came after it was circulated on Twitter that the exchange was insolvent due to an alleged connection to the Multichain Cross-Chain Router (MULTI) protocol. On May 24, analysts at Arkham Intelligence released data showing a large influx of MULTI on Gate.io as “the protocol team is allegedly arrested in Shanghai.” Multiple sources said that Multichain co-founder and CEO Zhao Jun is unavailable for communication and his Twitter account has been blocked.
On May 25, Binance suspended deposits for ten networks of Multichain Bridge Tokens amid uncertainty about the future of the project. The exchange said that the ban on transactions will remain in effect until the necessary clarifications are received from the Multichain team to restore work.
On May 31, Multichain representatives released a statement that the CEO has gone missing and some protocol routers are no longer operational as only the CEO has access to the respective servers. On the same day, some Twitter users began posting screenshots of transactions that allegedly represented large FTM deposits from members of the Multichain team on Gate.io. According to these posts, over $10 million worth of FTM was transferred from an unknown user to Gate.io on May 25-26.
Gate.io has received a Hong Kong Corporate and Trust Service Provider (TCSP) license, allowing the exchange to legally provide virtual asset custody services to residents of the region.