Cross-chain protocol Multichain, formerly known as Anyswap, reported that some of its bridges were unavailable due to “force majeure” and the time for service to resume was unknown.
While most of the cross-chain routes of Multichain protocol are functioning well, some of the cross-chain routes are unavailable due to force majeure, and the time for service to resume is unknown. After service is restored, pending transactions will be credited automatically.…
— Multichain (Previously Anyswap) (@MultichainOrg) May 24, 2023
The bridging platform lets users swap assets across blockchains using pegged tokens or liquidity pools. Some users reported an abnormal delay in the arrival of their funds on the platform’s Discord, with some funds not reaching the destination address for longer than 24 hours.
Developers attributed the delay to a backend node upgrade “taking longer than expected” before tweeting about the suspension of some bridges due to force majeure. Many users questioned how the term applied to decentralized blockchain bridges, which would generally be immune from external events.
The update also comes amid rumors that the team behind the protocol was arrested in China. Twitter user “0xfleet” said the rumored arrest was in connection with illicit use of funds on Multichain transactions in the past.
It's rumored that the multichain team has been arrested by the Chinese police, with 1.5 billion dollars of contract funds under control, and some team members transferred 494200 multi tokens from the team address to gate today. Please be aware of the risks.$multi #MultiChain pic.twitter.com/KpB9ehl5ls
— 0xfleet (@0xfleet) May 24, 2023
Following the news, several crypto entities began to pull liquidity from Multichain. Blockchain data shows that a wallet address linked to Fantom Foundation withdrew $2.4 million worth of the protocol’s native token MULTI on decentralized exchange SushiSwap. The HashKey Group moved $250,000 MULTI to crypto exchange Gate.io and Tron founder Justin Sun withdrew $470,000 of the USDD stablecoin from the Multichain protocol.
MULTI dropped 25% in the last 24 hours after unsettled investors began selling the token in large quantities. Since many of the assets on Multichain are on the Fantom blockchain, its native token FTM also dropped 10% over the same period.
Other blockchain bridges have also paused access to Fantom as a cautionary measure, including Stargate Finance and Synapse.
update since stargate turned fantom off
$6.5m USDC to ftm->arb, $2m ftm->opt, $800k ftm->eth, $600k avax->eth (these are multichain flows only)
still $194m USDC on fantom https://t.co/XOeJu0ME8W pic.twitter.com/cgbtYGyKcM
— Will Sheehan (@wilburforce_) May 24, 2023