- A wallet address connected to Fantom Foundation withdrew nearly 450,000 MULTI from liquidity on SushiSwap.
- The price drop began when users complained about not receiving their multichain funds due to a delay in the backend node upgrade.
- The FUD surrounding the firm also contributed heavily to the price drop of the multichain token.
The trading price of MULTI fell to $4.97 since the news about its delayed upgrade spread across the crypto community.
On May 24, Multichain experienced a glitch that caused its token price to drop 30% within a day. Customers of the cross-chain router protocol lamented the absence of their multichain funds due to the slowed backend node upgrade. They stated that the promotion was taking longer than usual.
While most reported the lateness of their multichain funds, a wallet connected to Fantom Foundation, a layer-1 blockchain developer, allegedly withdrew 449,700 MULTI worth $2.4 million from liquidity on SushiSwap.
A Twitter account with the handle 0xfleet made a tweet speculating that Chinese police officers had apprehended the multichain team with $1.5 billion of contract funds within their possession. At the same time, some other firm members transferred 494,200 MULTI from the firm’s address.
On the same day, Lookonchain, a blockchain analytics firm, announced $3 million worth of multi tokens outflows connected to smart money accounts.
Since the trending reports of users experiencing an abnormal delay in the arrival of their cross-chain funds, a team member of Multichain responded in the discord channel, announcing that not all routes were functioning.
“…Kava, zkSync, Polygon zkEVM have all been suspended temporarily. All affected transactions will appear when the upgrade is complete. We sincerely apologize for the inconvenience caused,” the message read.
Binance Suspends Deposits for Ten Tokens Concerning Multichain’s Abnormal Delay in Transactions
On May 25, the internationally recognized cryptocurrency exchange—Binance—announced on Twitter that it would be freezing ten bridged tokens, namely Dexe (DEXE), Polkastarter (POLS), Travala.com (AVA), SuperVerse (SUPER), Alpaca Finance (ALPACA), Alchemy (ACH), Harvest Finance (FARM), Spell (SPELL), Beefy (BIFI), and Fantom (FTM), as it waited for feedback from the Multichain team due to the news of the abnormal delay in receiving cross-chain funds.
On May 24, Multichain confirmed that some cross-chain routes were unavailable due to force majeure, and it had no specific time at which these routes would resume function.
“After service is restored, pending transactions would be automatically credited, and Multichain would compensate users affected during this process,” the cross-chain router protocol said.
The firm did not mention when it would begin its compensation, nor did it divulge the compensation plan in the message written on Twitter.
Conclusion
The spread of FUD around the crypto community led to the 30% price drop in Multichain’s token price (MULTI). Although none of its users reported severe damage, the firm still recorded some losses as an investor withdrew 449,700 MULTI from the platform due to the rumors.
