Rumors and Legal Actions
Gate.io, a centralized cryptocurrency exchange, has expressed its intention to take legal measures against the spreading of bankruptcy rumors. Speculation has been rampant since May in the cryptocurrency community regarding a possible link between Gate.io and the struggling cross-chain protocol Multichain.
“Those who spread panic amongst investors through mere rumors and gossip without any substantial evidence will face legal action,” was the message conveyed in a June 4th Twitter announcement, originally posted in Turkish.
Multichain Incidents Fueling Insolvency Speculations
The bankruptcy rumors surrounding Gate.io came to light following a chain of events related to Multichain. The cross-chain protocol has been dealing with technical issues since May 24, when a node problem resulted in transaction delays. The Multichain team revealed a few days later that they were unable to reach their CEO to rectify the server issues, intensifying previous rumors about the arrest of the protocol’s leadership and the seizure of over $1.5 billion in smart contract funds by Chinese authorities.
Gate.io’s Response to Liquidity Concerns
Gate.io initially refuted any liquidity issues on May 31, maintaining that its operations were functioning normally and that withdrawals weren’t a problem. Despite numerous reports of traders withdrawing funds on Twitter and Telegram, the exchange’s trading volume appears to have remained steady in recent days.
Gate.io’s Current Trading Situation
At present, Gate.io’s native token, GateToken (GT), is trading at $4.27, indicating a decrease of 9.7% over the past week, according to CoinGecko data. The exchange, originally established in 2013 in the Cayman Islands, has recently broadened its reach to Hong Kong, Turkey, and Dubai.
Other Exchanges’ Actions in Light of Multichain’s Troubles
The ongoing problems with Multichain have driven other cryptocurrency exchanges to take measures. On May 25, Binance suspended deposits for 10 bridged tokens on the BNB Smart Chain, Fantom, Ethereum, and Avalanche blockchain networks. Transaction downtime also led to the Fantom Foundation withdrawing 449,740 MULTI ($2.4 million) from liquidity on the decentralized exchange SushiSwap.
