Sometimes a lot happens in crypto land in a short time. This currently applies to Multichain. Last year, this blockchain protocol was already the victim of a massive hack, but it is not finished yet panic. Now the Chinese police and the impact Multichain has on Fantom is a cause for concern.
Chinese police confiscate Multichain wallet
Writing on Twitter, among other things WhaleChart and Gwei Research that Chinese authorities seized a Multichain wallet after a raid. This would contain cryptocurrencies worth more than $ 1.6 billion, and several Multichain team members would have been arrested.
Multichain co-founder aFred Xu is said to have stated in the official Telegram channel that nothing is happening and the team is just working. It is as yet unclear what the reason for the raid is and whether the rumor is correct.
It has, however, ensured that other crypto companies have also taken steps. This is what Binance has announced no longer allows deposits for a number of assets on different blockchains. Deposits for Fantom (FTM) on Ethereum (ETH) are now working again, but nine other altcoins are still on pause.
We’ll be temporarily suspending deposits for the following bridged tokens-network while we await clarity from the Multichain team.
Deposits of the above assets on other networks are…
— Binance (@binance) May 25, 2023
The protocol is a so-called ‘bridge’, which allows you to move tokens from one blockchain to another. Before it was hacked for $8 million in 2021, it was called Anyswap. According to Defillama the network has a Total Value Locked (TVL) of $1.5 billion at the time of writing.
Concerns about Phantom
The well-known problems with Multichain could also affect Fantom (FTM). This blockchain enables smart contracts and thus lets you mint assets. But Multichain is responsible for 35% of all assets minted on Fantom, and even 80% of all stablecoins on Fantom.
The Phantom Foundation stated yesterday that nothing is wrong, but on The Block Fantom Foundation Director Andre Cronje stated that it did pull MULTI coins worth $2.4 million from SushiSwap. He considered it unnecessary to provide liquidity for this coin in times of uncertainty.
Meanwhile, according to blockchain intelligence firm Arkham, Multichain has moved about $3 million worth of MULTI from internal wallets to exchanges.
Following rumors of the @MultichainOrg team being allegedly arrested in Shanghai, some large holders of $MULTI have begun moving funds.
Team wallets moving ~$3M or $MULTI to https://t.co/5ecSG3rKek have also spooked some investors, with $MULTI price falling 26.5% in 24h. pic.twitter.com/p2sQpu9Ass
— Arkham (@ArkhamIntel) May 24, 2023