Why Did Binance Abruptly Suspend Deposits for 10 Tokens?

Sahana Kiran
Source – Unsplash

The crypto-verse had its fair share of downfalls, bankruptcies, and scams throughout 2022. However, it seems that some of these issues continued to plague the industry in 2023 as well. One particular project, Multichain [MULTI], faced a significant setback due to various factors. A large-scale sell-off occurred when users were unable to collect their funds as a result of a node upgrade. Additionally, rumors spread about the network’s executives being missing, causing exchanges to become more cautious and vigilant about the situation.

Binance, the world’s largest crypto exchange, has taken proactive measures in response to the situation. The firm has announced a temporary suspension of deposits for several tokens that are part of bridged networks. This decision comes as the Multichain team has yet to provide the necessary clarifications. Today, Binance suspended deposits for the following token pairs: POLS-BSC, ACH-BSC, BIFI-FTM, SUPER-BSC, AVA-ETH, SPELL-AVAXC, ALPACA-FTM, FTM-ETH, FARM-BSC, and DEXE-BSC. The Changpeng Zhao-led exchange affirmed that deposits would reopen only after Binance garners some clarity from the Multichain team.

But what is really going on with Multichain?

The Multichain protocol was founded in July 2020 with the aim of facilitating inter-blockchain communications. Based in Singapore, the protocol quickly gained traction and gained significant milestones. It successfully surpassed $1.59 billion in total value locked [TVL]. The protocol even reached its peak TVL of $10.5 billion in early 2022.

However, things weren’t going so well behind the scenes. Numerous users reported difficulties in accessing their funds, which was linked to a backend node upgrade that took longer than initially expected. The prolonged upgrade process resulted in delays and anger among users who were unable to recover their funds during that period. A member of the community wrote in the Multichain Discord channel,

“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.”

It should be noted that the above-mentioned bridge pathways are still not operational. Furthermore, there have been rumors surfacing about the potential arrest or absence of Zhao Jun, the co-founder, and CEO of Multichain. These claims, which suggest that the CEO may be investigated or missing, have added to the prevailing downward trend around the project. Additionally, MULTI was trading for $4.75 with a 15.43% daily drop.