Multichain Rug-Pull Incident: Impact on Fantom Blockchain and Crypto Market Safety

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A recent rug-pull incident involving the Multichain protocol has shaken the foundations of the cryptocurrency market, with a massive $1.8 billion in multichain wallets reportedly locked. Unsubstantiated rumors are swirling that Chinese authorities have arrested Multichain team members, with law enforcement allegedly seizing control of these wallets.

The total-value-locked (TVL) of Multichain, amounting to $1.8 billion, has seen the Fantom blockchain suffer the most, with a monumental 36.7% impact. At present, the total assets on the Fantom blockchain stand at $1.66 billion, with approximately 40% held in Multichain. Multichain has emerged as one of the largest blockchain bridges within the cryptocurrency arena, enabling the swapping of tokens across several blockchains, including those of major platforms like Binance Chain, Polygon, Avalanche, and Ethereum.

In the wake of these concerns, Fantom took to Twitter to assure the public that its Multchain Bridge is functioning as intended. The statement has appeared to mitigate any substantial price dips in the native FTM token, as it is currently trading at a 0.75% decrease, with a price of $0.33 and a market cap of $925 million.

On the other hand, the Multichain situation has prompted the Fantom Foundation to exercise a degree of caution and, as a precautionary measure, it has withdrawn its funds from the liquidity pools on Sushiswap. As of May 24, the foundation has reportedly pulled $2.4 million of MULTI, the native token of the Multichain protocol.

Fantom Foundation Director Andre Cronje addressed the situation, stating, “No point to LP at times of uncertainty. You can see in the wallet the funds haven’t been sold, as soon as Multichain is able to release a statement around this and clear it up we will LP again.” This sentiment highlights the ongoing unease surrounding the Multichain protocol and its impact on the cryptocurrency market.

The crypto world eagerly awaits an official statement from Multichain to clarify the ongoing situation and provide further insight into the future of this major blockchain bridge. It is crucial for crypto enthusiasts to remain vigilant and conduct thorough market research before committing to any investments, as uncertainties in the space can lead to significant financial setbacks.

Source: Coingape

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