Since Wednesday, the Multichain bridge (MULTI) has been in turmoil, after several users saw their transactions never arrive at their destination. At the same time, unconfirmed rumours claim that members of the protocol team have been arrested in China.
Multichain bridge sees transactions blocked
Since Wednesday, the Multichain cryptocurrency bridge has been the subject of questions and rumours. At the time of writing, its MULTI token was trading at $5.05 each, a loss of 22.5% in 24 hours.
The concrete elements of this affair include blocked transactions. A number of users voiced their concerns on the project’s Discord server about transactions that were not arriving at their destination blockchain.
Last night, Multichain confirmed that “certain interchain routes were unavailable due to force majeure”. Without being able to give a timeframe for a possible return to normal, the protocol’s teams announced that a compensation plan would be announced at a later date:
While most of the cross-chain routes of Multichain protocol are functioning well, some of the cross-chain routes are unavailable due toforce majeure, and the time for service to resume is unknown. After service is restored, pending transactions will be credited automatically….
– Multichain (Previously Anyswap) (@MultichainOrg) May 24, 2023
What’s more, a contagion has begun to be felt in the Fantom ecosystem. For good reason, the MTF is down 6.7%, and its total locked value (TVL) is down nearly 13% on its various decentralised finance protocols (DeFi), according to DefiLlama data.
Concerns are said to stem from the fact that the network is heavily dependent on Multichain, and the collapse of the latter could cause damage to Fantom. If we look at the bridge’s statistics, we can see that the main USDC pool is worth nearly $82 million, while the fUSDT pool is worth more than $62 million.
Nevertheless, Fantom has tried to reassure its community by indicating that the bridge is working normally for them:
Update: The @MultichainOrg bridge with Fantom is operating as normal.
– Fantom Foundation (@FantomFDN) May 25, 2023
MULTI sale and rumours of arrest
Aside from these blocked transactions, which have been confirmed, rumours have emerged that members of the Multichain team have been arrested in China:
It’s rumored that the multichain team has been arrested by the Chinese police, with 1.5 billion dollars of contract funds under control, and some team members transferred 494200 multi tokens from the team address to gate today. Please be aware of the risks.$multi MultiChain pic.twitter.com/KpB9ehl5ls
– 0xfleet (@0xfleet) May 24, 2023
Pending further information, however, these rumours should be treated with extreme caution. Nevertheless, the founder of Primitive Ventures, one of Multichain’s investors, tweeted shortly afterwards about the Chinese authorities’ crackdown on crypto projects:
It’s sad but true that in mainland China, there is on going action against ANY local operating crypto projects including infra, dapps, DeFi beyond just Cex, wallet or mining
Any local gov can go after any crypto project they deem “rich” or have sizable fund under custody…
– Dovey “Rug the fiat” Wan (@DoveyWan) May 24, 2023
In addition, more than 494,000 MULTI tokens have been transferred to Gate.io, and sales volumes have rocketed on the exchange.
For the time being, Multichain has not provided any further information about these events, so we will have to wait and see before the vagueness surrounding the bridge can be lifted.
In the meantime, it would be wise to be cautious about using the protocol. Even if everything could quickly return to normal, the fact that transactions could remain blocked is a warning not to take any risks.
On all the networks where the protocol operates, Multichain has a TVL of 1.53 billion dollars.
