After community rumors were investigated by the police, Gate.io experienced a net outflow of $150 million in the past 24 hours, accounting for about 10% of its net reserve assets.
Gate issued a statement saying their operations are running smoothly with no withdrawal issues. Crypto exchange platform Gate denied rumors of liquidity concerns after numerous Twitter channels had alleged that the exchange was experiencing insolvency due to an alleged connection between it and the cross-chain router protocol Multichain (MULTI).
However, the crypto exchange clarified that the “operations are running healthy” and that it is focused on establishing an affiliated trading platform in Hong Kong called Gate. HK.
The rumors of Gate facing insolvency issues arose after blockchain analytics firm Arkham Intelligence tweeted data showing large inflows of MULTI to Gate.io. The blockchain analytics firm said the inflow was related to rumors of the protocol’s team “allegedly being arrested in Shanghai.”
As reported earlier, Multichain issued a statement saying that its CEO was missing. It added that some of the protocol’s routers no longer work because only the CEO had access to the relevant servers. Later that day, some Twitter users began posting images of transactions that were allegedly large deposits of FTM from Multichain team members to Gate.io.
More than $10 million of FTM was transferred from an unknown user to Gate.io on May 25-26. However, the identity of the account owner who transferred those funds could not be confirmed.
Following a series of heavy deposits of MULTI and Fantom to Gate.io, rumors emerged on Twitter that the crypto exchange was exposed to fallout from Multichain and might face a bank run soon.