• Multichain team allegedly arrested by Chinese police and a wallet with $1.5 to $1.7 billion was seized
• Daily bridging volume saw 5x increase, however Fantom (FTM) ecosystem did not panic as much
• Binance temporarily suspended deposits for several tokens while awaiting clarity from the Multichain team
Multichain Team Arrested
Rumors have been spreading throughout the cryptoverse that the major blockchain bridge Multichain team has been arrested by the Chinese police – with the shockwaves hitting the Fantom (FTM) ecosystem softer than expected. Per several Twitter accounts, the Chinese community has been reporting the core team members‘ arrests, as well as that law enforcement gained control of a wallet with some $1.5 billion – &1.7 billion in it. „Alfred Xu, the co-founder of Multichain, said in the official Telegram community that the current team is healthy, the main business is normal, and the route will be restored automatically.“
Multichain Response
The Multichain team did not provide further clarification on their arrest situation but on May 24th they shared that „while most of its cross-chain routes are functioning well, some are unavailable due to force majeure, and no time frame for resumption has been set“. Force majeure being an event outside one’s control and accountability. They added that it would compensate affected users.
Bridging Volume Increase
Researcher Defi Ignas noted a 520% spike in daily bridged volume after rumors spread about their arrest, adding that deposits exceeded withdrawals by $18 million dollars following these FUD related tweets. „This resulted in a 5x increase in daily bridging volume“, said researcher Defi Ignas.
Binance’s Response
Notably Binance said it temporarily suspended deposits for several tokens „while we await clarity from the Multichain team“ knowing how important this bridge is to many blockchains including Ethereum, Polygon, Avalanche and BNB Chain – all totaling up to a TVL of around $1.75 billion at present according to multichian site multichian.org..
Fantom Case
Prominent Chinese journalist Colin Wu noted that Fantom network accounts for highest proportion of TVL within Multichian ($643 million out of total 1$75 billion) making them particularly exposed to situation if reports are true – nevertheless only hours later Binance resumed deposits for FTM token once more seeking clarification from Mutlchain Team directly which hasn’t come yet officially even though Alfred Xu assured public via telegram channel that main business is normal and route will be restored automatically implying there might be nothing serious behind this incident after all..