The rug-pull event in the Multichain (MULTI) protocol created shockwaves in the cryptocurrency market as an astounding amount of $1.8 billion funds locked up in Multichain wallets. Rumors circulate that Chinese authorities have arrested Multichain team members, and law enforcement has seized control of the project wallets. The altcoin project most affected by the Multichain crisis is Fantom (FTM).
Fantom Hit by Multichain Crisis
Fantom is hit hard by the Multichain crisis, maintaining the highest affected Blockchain with a 36.7% stake in the total locked-in value (TVL) of $1.8 billion within Multichain. At present, the total assets on the Fantom Blockchain amount to $1.66 billion, nearly 40% of which are bridged on Multichain. Multichain, known as one of the biggest Blockchain bridges in the crypto market, simplifies the swapping of coins/tokens between multiple Blockchains. Top altcoin networks like Binance Chain (BSC), Polygon (MATIC), Avalanche (AVAX), and Ethereum (ETH) also use the Multichain bridge directly.
Multichain also serves as the official cross-chain bridge for Fantom, a Blockchain that supports smart contracts and is backed by the network’s native asset, FTM. Crypto journalist Colin Wu pointed out the severity of the situation for Fantom, stating, “On Fantom, the main stablecoin USDC, along with $191 million USDC and $82 million USDT, is primarily issued by Multichain.”
“Fantom Network Operating Normally”
Despite widespread concerns in the crypto market related to the Multichain crisis, Fantom announced that the Multchain bridge operates normally. This statement prevented a significant price correction in FTM, currently trading at $0.33 with a market cap of $925 million, down 0.75% in the last 24 hours.
Following the Multichain event, the Fantom Foundation withdrew funds from Sushiswap’s liquidity pool (LP) to pre-empt potential future problems. On May 24, the Foundation withdrew $2.4 million from the native asset MULTI of the Multichain protocol.
In an interview with The Block, Fantom Foundation Director Andre Cronje commented, “There’s no point in LP during times of uncertainty. You can see that the funds in the wallet haven’t been sold. As soon as Multichain clarifies the issue, we’ll resume LP.”
