Rumors have recently circulated throughout the crypto community that the core team behind the major blockchain bridge, Multichain, has been arrested by Chinese police. Surprisingly, the impact on the Fantom (FTM) ecosystem has been relatively mild.
Reports have emerged that law enforcement has gained control of a wallet containing between $1.5 and $1.7 billion. In response to these rumors, Alfred Xu, co-founder of Multichain, reassured the community that the team is healthy and operating normally. However, the Multichain team did not offer any further clarification on the matter.
Despite the lack of confirmation, daily bridged volume has seen a staggering 520% spike, with deposits surpassing withdrawals by $18 million following the rumors, according to researcher Defi Ignas.
Multichain, formerly known as Anyswap, is an important bridge that facilitates interaction between several major blockchains, including Ethereum, Polygon, Avalanche, and BNB Chain. It currently has a total value locked (TVL) of around $1.5 billion to $1.75 billion.
In response to the situation, Binance temporarily suspended deposits for several tokens while they awaited clarity from the Multichain team. Deposits for FTM were later resumed.
Considering that the Fantom network accounts for the highest proportion of Multichain’s TVL and has a significant exposure, panic might have been expected. However, several researchers have noted that there is not much panic in the market, with the clearest signs being the withdrawal of $33 million by liquidity providers (LPs) and only $1.7 million in deposits on Fantom. It is important to note that Fantom itself has not commented on the situation, merely stating that their Multichain bridge is operating as usual.
As for the FTM token, it has seen minor fluctuations in price, remaining largely unchanged in the past 24 hours and declining by 11% over the past week.
Despite the uncertain circumstances, blockchain analytics firm Arkham Intelligence has reported significant movement of funds by major MULTI token holders, as around $3 million were transferred within 24 hours. Meanwhile, the MULTI token price has suffered significant losses, dropping 20% within a day and 50% within a week.
Although some may argue that the worst is yet to come, on-chain data does not reveal massive outflows of capital. Nevertheless, the lack of communication from the Multichain team regarding the situation remains concerning for many within the crypto community.
Source: Cryptonews
