Binance Stops Token Deposits Due to Multichain Issues

CFTC files lawsuit against Binance and Changpeng Zhao
CFTC files lawsuit against Binance and Changpeng Zhao

Cryptocurrency exchange Binance has temporarily suspended deposits in POLS, ACH, BIFI, SUPER, AVA, SPELL, ALPACA, FTM, FARM, and DEXE tokens due to an issue with the Multichain cross-chain protocol network.

The lock only applies to qualifying assets issued on the Ethereum, BNB Chain, Avalanche, and Fantom networks. Deposits of the same tokens, but from other blockchains, are still open.

Platform representatives added that they expect clarification from the Multichain team.

The problem arose in the protocol on May 21, when users began to complain about frozen transactions. The developers stated that the malfunction appeared in the process of technical work on the nodes of cross-chain routers.

Later, the Multichain team promised compensation to those affected by the “force majeure”. According to the statement, most of the internetwork routes are working “normally”. However, some are still unavailable and “service resumption unknown” time.

Against the background of malfunctions in Multichain, the native token of the MULTI network collapsed by almost 30%. Then many large investors began withdrawing to sell their assets. One of them sent 494,200 MULTI (~$2.75M) to the exchange.

The Fantom Foundation also became concerned about the situation and withdrew 450,000 protocol tokens (~$2.4 million) from the liquidity pool on the SushiSwap decentralized exchange.

Director of the organization Andre Cronje said the fund withdrew the funds for security reasons.

“There is no point in a liquidity pool in times of uncertainty,” he added.

According to him, the company did not sell a single MULTI token, but only withdrew them from SushiSwap. The Fantom Foundation is monitoring further developments.

Recall that in April, Binance updated the deposit addresses of some users. The company explained the step by improving the infrastructure of the wallet.

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