Centralized crypto 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 troublesome cross-chain protocol Multichain.
"Legal proceedings will be launched against people who cause panic among investors only with rumors and gossip, without relying on any concrete source," he added. read a June 4 Twitter ad originally written in Turkish.
We present it to the information of all our users.
Please do not give credit to false and untrue rumors. pic.twitter.com/6SpuKx0rU8โGate.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 node issue delayed transactions. A few days later, the Multichain team revealed that he could not contact his CEO to access the servers and resolve the issue, fueling previous rumors that the protocol's 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 on May 24 presented large Multichain (MULTI) token inflows from the Gate.io platform.
Gate.io first denied liquidity problems on May 31, claiming that its operations were "working fine" and that withdrawals were not an issue. Although Twitter and Telegram channels have been inundated with reports of traders withdrawing funds, the trading volume of the exchange appears remain relatively stable in recent days.
At the time of writing, its native GateToken (GT) token is trading at $4.29, down 9.6% over the past seven days. shows CoinGecko data. First founded in 2013 in the Cayman Islands, the exchange recently expanded to Hong Kong, Turkey, and Dubai.
Ongoing Multichain issues prompted other crypto exchanges to take action. Binance suspended deposits for 10 bridged tokens on the BNB Smart Chain, Fantom, Ethereum, and Avalanche blockchain networks on May 25. The transaction downtime also led the Fantom Foundation to remove 449,740 MULTIs ($2.4 million) of liquidity on the SushiSwap decentralized exchange.
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