In response to mounting rumors of imminent bankruptcy, centralized cryptocurrency exchange Gate.io has issued a stern warning of legal action against those responsible for spreading panic among investors.
The exchange has categorically denied any connection between its operations and the troubled cross-chain Multichain protocol, which has faced technical difficulties and speculation surrounding its leadership.
Gate.io’s statement, initially published on Twitter in Turkish, expressed the exchange’s intention to initiate legal proceedings against individuals who rely on unsubstantiated rumors and gossip without any concrete sources. The exchange seeks to quell the growing concerns and restore confidence in its services.
The rumors of Gate.io’s insolvency emerged after several events involving Multichain, a cross-chain protocol grappling with technical challenges since May 24. On that day, a node issue caused significant delays in transactions.
Several days later, the Multichain team revealed they could not contact their CEO to access the servers and resolve the problem. These developments fueled speculations that the protocol’s leadership had been arrested and that Chinese authorities had seized over $1.5 billion in smart contract funds.
On May 24, blockchain analytics firm Arkham Intelligence reported substantial inflows of Multichain tokens (MULTI) from Gate.io’s platform. While Gate.io initially denied any liquidity issues on May 31 and claimed its operations were “running healthy,” reports of traders withdrawing funds flooded social media channels such as Twitter and Telegram. Despite these reports, Gate.io’s trading volume has remained relatively stable recently.
Gate.io’s denial of the bankruptcy rumors aims to dispel concerns and reassure investors about the exchange’s financial stability. By threatening legal action against those responsible for spreading panic, the exchange seeks to protect its reputation and restore trust in its services. It remains to be seen how the situation will unfold and whether Gate.io’s actions will effectively quell the rumors surrounding its alleged connection to Multichain.
As the cryptocurrency industry evolves, incidents like these highlight the challenges and risks associated with decentralized finance and cross-chain protocols. Investors are urged to exercise caution and rely on verified information from credible sources before making any financial decisions in this rapidly changing landscape.
