Gate.io Records $160 Million in Withdrawals as Multichain Rumors Rage 

Gate.io becomes the latest crypto exchange to find itself at the center of insolvency rumors.

A fancy golden door wide open, money and golden coins flowing out of it.
Created by Gabor Kovacs from DailyCoin
  • In the wake of the FTX collapse, crypto exchanges have struggled to maintain trust.
  • Gate.io has found itself at the center of insolvency rumors.
  • Rumors have driven customers to rush to withdraw their funds.

Centralized crypto exchanges have struggled to maintain trust in the fallout of the FTX collapse in November 2022. Despite launching features like proof-of-reserves to boost transparency, several investors have remained skeptical, allowing rumors to trigger panic easily.

In recent days, Gate.io has become the latest crypto exchange to find itself at the center of insolvency rumors. While the crypto exchange has dismissed these rumors, it has not stopped customers from rushing to withdraw their assets en masse.

Gate.io Records Most Outflows Amongst Crypto Exchanges 

At the time of writing, Gate.io has recorded $158.49 million in outflows in the last 24 hours, per data from DeFiLlama’s CEX Transparency page. The figure is about five times higher than Crypto.com’s $30.88 million, the second-highest outflow. The withdrawals also equal nearly 10% of Gate.io’s total assets.

The run on deposits follows recent rumors of Gate.io insolvency fueled by a crisis affecting a separate cross-chain router protocol Multichain. Wallets labeled by Arkham Intelligence as belonging to members of the Multichain team had moved about $3 million worth of tokens to Gate.io on May 24, spooking Multichain investors amid rumors that the group had been arrested in Shanghai.

At the same time, Binance halted deposits for ten Multichain bridged tokens citing transaction delays. On Wednesday, May 31, Multichain issued a statement disclosing that the Chief Executive Officer Zhaojun was unreachable. Following the release of this statement, Coinsumption, a highly followed crypto Twitter account, alleged that the Multichain crisis somehow affected Gate.io, urging users to withdraw assets from the platform.

Gate.io notably issued a statement on the same day dismissing these speculations.

We would like to clarify that our operations are running healthily, withdrawals are functioning properly, and there are no issues with our operations or withdrawals as rumored," the firm wrote, adding that it was currently focusing efforts in Hong Kong, where it was launching a new platform.

Recent rumors have also impacted Gate.io’s token (GT) which at the time of writing is trading nearly 9% lower in the past 24 hours.

On the Flipside 

  • There have been no confirmed reports of Gate.io users having withdrawal issues.
  • Gate.io claims to be the first crypto exchange to launch proof-of-reserves.

Why This Matters 

The run on Gate.io deposits over insolvency rumors highlights the fragile trust in centralized crypto exchanges in the wake of the FTX collapse and the benefits of self-custody solutions.

Read this to learn more about Gate.io’s proof-of-reserves:

Gate.io Announces It Will Make Its Merkle Tree Proof of Reserves Solution Open-Source 

Find out what Binance is saying about reports of layoffs:

Binance Denies Layoffs are ‘a’a Cost-Cutting Measure”

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Okoya David

David Okoya is a crypto news reporter at DailyCoin based in Nigeria. He covers various topics related to the cryptocurrency industry, including exchanges, regulations, and price movements, and strives to bring fresh angles to breaking news. With experience as a freelance crypto news writer, David upholds the highest journalistic standards, telling complete stories and answering lingering questions whenever possible.