Gate.io, a cryptocurrency exchange, experienced a significant net outflow of $150 million in response to rumors of a police investigation and its alleged connection to Multichain, a cross-chain router protocol. The outflow amounted to approximately 10% of the exchange’s net reserve assets within 24 hours.
In an attempt to address the situation, Gate.io issued a statement reassuring its users that its operations were functioning smoothly and that there were no withdrawal issues. The exchange denied the rumors of liquidity concerns that had surfaced on various Twitter channels, emphasizing that its operations were healthy. Additionally, Gate.io disclosed its focus on establishing a related trading platform called Gate.HK in Hong Kong.
The insolvency rumors surrounding Gate.io gained momentum when Arkham Intelligence, a blockchain analytics firm, shared data indicating significant inflows of the Multichain token (MULTI) into the exchange. Arkham Intelligence suggested that these inflows were tied to rumors of the arrest of the protocol’s team in Shanghai.
Multichain itself had previously released a statement reporting the disappearance of its CEO and explaining that certain routers within the protocol were no longer functioning due to restricted access. Following this announcement, Twitter users began sharing images of what appeared to be large deposits of Fantom (FTM) from Multichain team members into Gate.io. However, the identity of the account owner responsible for transferring these funds could not be verified.
The series of substantial deposits involving MULTI and Fantom into Gate.io fueled speculation on Twitter that the exchange was at risk of being negatively affected by the Multichain situation and could potentially face a bank run shortly. Despite these rumors, Gate.io maintained its stance that its operations were stable and continued to address the concerns raised by the community.
Overall, Gate.io found itself entangled in a web of rumors and speculation surrounding police investigations, liquidity concerns, and its alleged involvement with Multichain. The exchange attempted to reassure its users by asserting the smooth operation of its services and its focus on establishing a related trading platform in Hong Kong.