Gate.io threatens legal action against rumors spreaders.
The centralized cryptocurrency exchange Gate.io has threatened legal action against those spreading rumors of its imminent bankruptcy. Since May, members of the cryptocurrency community have been speculating about a possible connection between Gate.io and the troubled cross-chain protocol, Multichain.
In a Twitter announcement originally written in Turkish on June 4, Gate.io stated, “Legal proceedings will be initiated against people who cause panic among investors only with rumors and gossip, without relying on any concrete source.”
We would like to inform all our users. Please do not pay attention to rumors and gossip that are not true and have no basis in reality. pic.twitter.com/6SpuKx0rU8
— Gate.io (@gate_io) June 4, 2023
The rumor of Gate.io’s insolvency surfaced 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, Multichain’s team disclosed it couldn’t contact its CEO to access the servers and resolve the problem, fueling previous rumors that the protocol’s leadership had been arrested and over $1.5 billion in smart contract funds seized by Chinese authorities.
Data from the blockchain analytics firm, Arkham Intelligence, on May 24 showed large inflows of Multichain tokens (MULTI) from Gate.io’s platform.
Gate.io denied liquidity issues on May 31, claiming its operations were “running healthy” and that withdrawals were not an issue. Although Twitter and Telegram channels have been flooded with reports of traders withdrawing funds, the exchange’s trading volume appears to remain relatively steady in the past few days.
At the time of writing, its native token, GateToken (GT), trades at $4.29, a decline of 9.6% in the past seven days, according to data from CoinGecko. Gate.io was first founded in 2013 in the Cayman Islands and recently expanded to Hong Kong, Turkey, and Dubai.
Multichain’s ongoing issues prompted other cryptocurrency 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. Transaction downtime also led the Fantom Foundation to remove 449,740 MULTI ($2.4 million) from liquidity on the decentralized exchange SushiSwap.
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