A rug-pull kind of incident at the Multichain protocol has sent shockwaves across the crypto market. A staggering $1.8 billion in multichain wallets have been locked and rumors have it that the Chinese authorities have arrested Multichain team members with law enforcement taking control over the wallets.
Of the total $1.8 billion in total-value-locked (TVL) of Multichain, the Fantom blockchain remains the most impacted with 36.7%. As of now, the total assets on the Fantom blockchain are $1.66 billion and nearly 40% of these assets have been wrapped on Multichain.
As we know, Multichain is one of the largest blockchain bridges in the crypto space. Thus, it facilitates the swapping of tokens across multiple blockchains. Top platforms such as Binance Chain, Polygon, Avalanche, and Ethereum have been using the Multichain bridge.
Multichain is also the official cross-chain bridge for the Fantom, a blockchain supporting smart contracts and powered by native FTM tokens. Crypto journalist Colin Wu notes: “the main stablecoin on Fantom is 191 million, USDC and 82 million USDT assets are basically issued by Multichain”.
Fantom Operating As Normal
As the concerns over the Multichain crisis spread across the crypto market, Fantom took it to Twitter stating that its Multchain Bridge is operating as normal.
Update: The @MultichainOrg bridge with Fantom is operating as normal.
— Fantom Foundation (@FantomFDN) May 25, 2023
This assurance has prevented any major price correction in the native FTM token which is currently trading 0.75% down at a price of $0.33 and a market cap of $925 million.
As a matter of caution following the Multichain situation, the Fantom Foundation has withdrawn its funds from the liquidity pools on Sushiswap. As of May 24, the foundation pulled out $2.4 million of MULTI, which is the native token of the Multichain protocol.
Speaking to The Block, Fantom Foundation Director Andre Cronje said: “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”.
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