Multichain token plunges 30% on backend upgrade delay

On May 24, the token price of cross-chain router protocol Multichain (MULTI) fell by 30% over 24 hours to trade at $4.97 at the time of publication. 

The selloff came after users reported that their multi-chain funds had not arrived due to a backend node upgrade “taking longer than expected.” An admin in the Multichain Discord channel wrote:

“Most routes are working as usual, as some routes (Kava, zkSync, Polygon zkEVM) are temporarily suspended. All affected transactions will arrive after the upgrade is complete. We sincerely apologize for the inconvenience caused.”

At the same time, a wallet address linked to layer-1 blockchain developer Fantom Foundation reportedly removed 449,740 MULTI ($2.4 million) from liquidity on decentralized exchange SushiSwap. Rumors also appear to have fueled the selloff. In a tweet viewed over 300,000 times since publication, one user wrote: “It’s rumored that the multichain team has been arrested by the Chinese police, with 1.5 billion dollars of contract funds under control.”

The same day, blockchain analytics firm Lookonchain reported at least $3 million worth of MULTI outflows linked to smart money accounts. 

Founded in July 2020 in Singapore to serve the need for inter-blockchain communications, the Multichain protocol has since surpassed $1.59 billion in total value locked (TVL), reaching a peak TVL of $10.5 billion in early 2022 before the onset of the cryptocurrency bear market.

Cointelegraph reported in December 2021 that Multichain raised $60 million in a seed round led by Binance Labs, the venture capital arm of cryptocurrency exchange Binance. Earlier this month, Multichain pledged a $100 million ecosystem fund to accelerate native multi-chain projects.

⚠️ Dear BitKeepers, according to industry news, there has been a problem with @MultichainOrg’s cross-chain bridge transaction function, and several #MultiChain community users reported abnormal delays in cross-chain assets.

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— BitKeep Wallet (@BitKeepOS) May 24, 2023