On the evening of May 24, a number of problems occurred in the Multichain network. After the problems, the founder of Multichain could not be reached again. Unsettled by the uncertainty at Binance, MULTI suspended trading. The network, which has about $ 1.8 billion in lockdown, puts these altcoins in danger.
Multichain has $1.8 billion in cryptocurrency reserves
According to market researcher Boring Sleuth, Multichain currently holds $1.8 billion in different coins spread across different networks. The researcher says that if Multichain makes a move for a rug pull operation, it will cause disaster in the market.
According to Sleuth’s statements, “Multichain has $1.8 billion in locked assets under control across several chains, not just Fantom. If they really did rug pull, it would affect prices on all coins across all networks.”
Commenters are of the opinion that Multichain feels like an UST-like collapse. As Cryptokoin.com reported, the Terra and FTX bankruptcies of 2022 had brought the bear market to the bottom.
Phantom (FTM), altcoin most affected by the crisis
40% of the assets in Phantom, worth a total of $1.66 billion, were packaged in Multichain. As of now, the total assets in the Fantom network are $1.66 billion. Multichain’s reserve represents 40% of them.
Meanwhile, Multichain is one of the largest Blockchain bridges in the crypto space. Thus, it facilitates token exchange across multiple networks. Top platforms like Binance Chain, Polygon, Avalanche and Ethereum use the Multichain bridge.
Multichain is also the official cross-chain bridge for Fantom, supporting smart contracts. Another researcher, Colin Wu, states:
The main stablecoin in Phantom is 191 million, USDC and 82 million USDT assets are basically issued by Multichain.
Red flags about the 1.8 billion altcoin project
The entire assumption that the Multichain protocol is making moves to defraud its users came from the announcement that cross-chain transactions were unavailable due to force majeure. Protocol reported that at the time it was working to bring the network back online. However, he did not share a specific timeline for when normal operations will resume.
The protocol then promised to reimburse users for any damages they may incur as a result of the incident.
While most of the cross-chain routes of Multichain protocol are functioning well, some of the cross-chain routes are unavailable due to force 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
With the leaders of the multichain protocol now under the radar, it is now easier to track funds under the firm’s control. Thus, it could perhaps help mitigate the impact of any potential contention that could emerge as a major crypto crash.
FTM and MULTI prices fall
As concerns over the Multichain crisis spread, Fantom took the situation to Twitter, stating that the Multichain Bridge was operating normally. This assurance prevented any major price corrections in FTM price. FTM is currently trading slightly lower at $0.331880.
On the other hand, MULTI succumbs to the news of Fud. Its price has been in free fall since May 24, when network-related troubles surfaced.
58872
