Home Altcoins Binance Suspends Withdraw and Deposits of Multiple Coins: What has Happened?

Binance Suspends Withdraw and Deposits of Multiple Coins: What has Happened?

Teuta Franjkovic
Published July 5, 2023 2:30 PM
Key Takeaways
  • Users who use bridged tokens on networks like BNB Smart Chain, Fantom, Ethereum, and Avalanche are impacted by Binance’s decision
  • Following the news, the value of Multichain’s MULTI token dropped by 7%
  • The ban comes after a prior one that was implemented in May following an incident involving Multichain-bridged coins

According to a statement  released on Wednesday by the cryptocurrency exchange Binance, deposits and withdrawals for a number of tokens connected to the cross-chain router technology Multichain will be suspended.

As per the crypto exchange, the suspension of Multichain-bridged tokens will begin on July 7 at 0:00 UTC and continue “until further notice.”

Statistics are showing that Multichain’s MULTI token fell 7% to $3.10 at the time of writing in response to news of Binance’s recent suspension of certain of its bridged tokens.

Credit: TradingView

Since the protocol’s problems started in May, its price has been moving downward. During this time, it has dropped by more than 60%.

CEO Being Allegedly ‘Unjailed’

The Multichain team announced in May that they had been unable to reach CEO Zhaojun due to suspicions that he had been detained in China. Around this time, the protocol’s cross-chain bridge underwent an improperly planned upgrade, which the team blamed on “force majeure.”

Several users reported delayed transactions as a result of these occurrences, and significant investors, including Justin Sun, the founder of Tron (TRX), the Fantom Foundation, and others, decided to minimize their exposure to the MULTI coin.

Zhaojun’s whereabouts are still unknown, but on June 5, Bobie, the creator of the Web3 knowledge graph protocol 0xScope, tweeted  that Multichain had partially restarted operations, which might be interpreted as the CEO being “unjailed.”

10 Multichain-Bridged Tokens Affected

The suspension in deposits and withdrawals will have an effect on a number of networks, according to Binance’s warning to users, including Fantom, Ethereum, and Avalanche C-Chain. Multichain-bridged tokens in particular that users cannot transfer through the aforementioned chains anymore are: Alpaca Finance (ALPACA), Beefy.Finance (BIFI), Polkastarter (POLS), Alchemy Pay (ACH), SuperVerse (SUPER), and Harvest Finance (FARM) on the BNB Smart Chain; Spell Token (SPELL), on Avalanche C-Chain; and Travala (AVA), on the Ethereum bridge.

Although Binance did not give specific reasons for ending support for the aforementioned bridge tokens, it emphasizes that the action was related to the suspension of a number of Multichain bridge tokens earlier.

This news follows the suspension of deposits for a number of Multichain-bridged tokens on May 25, 2023, after several days of blocked transactions that raised doubts about the Multichain system.

According to a spokesman from Binance, the momentary suspension of deposit and withdrawal options for the listed tokens is a risk management strategy designed to protect customers’ money.

Buterin Warned About Dangers of Cross-chain Bridges

Cross-chain bridges have received a lot of bad attention because people think they are vulnerable. One of several famous crypto experts who has advised against relying on cross-chain bridges is Vitalik Buterin, the co-founder of Ethereum.

This year, Buterin suggested in a blog post  that individuals “try to minimize how much you rely on bridges at all,” and that cryptocurrency users “hold assets on the chain where they originate.”

The exchange emphasized that users can still access these transfers via other Binance-supported networks, even though deposits and withdrawals for the aforementioned currencies are no longer permitted on Binance via the chains named.

Crypto hackers have started to target cross-chain bridges, which includes the Multichain protocol frequently. Early in 2022, many hackers stole $3 million from Multichain. Later, a whitehat hacker gave back $900,000 of it.

Only two months later, Sky Mavis, the creator of Axie Infinity, became the victim of one of the biggest breaches in history when hackers stole $622 million from the link connecting Sky Mavis’s unique Ronin sidechain to Ethereum.

Following the assault, Binance organized a $150 million financing round to compensate victims. The makers of the well-known cryptocurrency game The Sandbox, Animoca, and the digital venture capital firm a16z contributed.