Gate.io, one of the top cryptocurrency exchanges in the world, has been confronted with rumors of insolvency following the arrest of Multichain CEO Zhaojun and concerns over a 30% backing of the Multichain Treasury. These rumors have led to increased withdrawals from the exchange, with a net outflow of $131 million USD in the last 24 hours alone. To put this into perspective, Gate.io’s 7-day net outflow stands at $144.8 million USD per year, according to data compiled by Nansen.
The rumors of Gate.io’s insolvency originated from a tweet claiming a connection between the exchange and Multichain after the arrest of Multichain CEO Zhaojun. The tweet alleged that Gate.io is on the verge of insolvency due to its involvement with Multichain and the potential impact of Zhaojun’s arrest on the state treasury of Multichain.
Despite these rumors, Gate.io has denied insolvency claims and assured its users that all funds are safe. The cryptocurrency exchange recently released a statement to dispel rumors about its operations and withdrawals. Gate.io assured users that its processes are solid, withdrawals are functioning properly, and there are no issues with alleged operations or withdrawals.
Furthermore, Gate.io emphasizes its commitment to providing secure, fast, and reliable virtual asset services to users, and urges users to be cautious of unwanted calls or messages allegedly from the exchange. The exchange currently holds assets of $2.4 billion USD, including 18% in Gate.io’s native token GT, 15% in Ethereum (ETH), 15% in Bitcoin (BTC), and other cryptocurrencies.
Despite these assurances, the increase in withdrawals from Gate.io highlights the impact of rumors and speculations on the cryptocurrency market, particularly during times of uncertainty. However, Gate.io has stated that it has no direct connection to Multichain and that Zhaojun’s arrest has no impact on its operations. The exchange also emphasized that all funds are kept in cold storage, providing an additional level of security for users’ assets.
In addition, Binance CEO CZ recently advised investors to turn to the Secure Asset Fund for Users (SAFU) after quoting a tweet from Multichain reporting several protocol issues due to unforeseeable circumstances. The tweet mentioned that the team had done everything possible to keep the protocol running, but was unable to contact CEO Zhaojun and obtain necessary server access for maintenance.
The tweet also mentioned a problem with Router5’s scan node network, affecting the normal cross-chain service of some chains. To protect users’ interests, the corresponding cross-chain service for the affected chain was suspended on the user interface (UI). This issue is said to have occurred on Router2 in the previous week as well.
The timing of CZ’s advice to SAFU and the issues reported by Multichain have led to speculation that this may be an early warning for investors of the potential risks associated with Gate.io. However, it is important to note that CZ did not explicitly mention Gate.io in his tweet, and there is no direct connection between Gate.io and Multichain.
Gate.io’s native token GT has fallen on the 1-day chart, according to TradingView.com. Nonetheless, Gate.io has assured its users that it remains a reliable and secure cryptocurrency exchange, and investors should exercise caution and do their own research before making any decisions.