Binance halts deposits and withdrawals for 8 multichain-bridged tokens until further notice.

Binance has announced that it will temporarily halt support for withdrawals and deposits of 8 Multichain-bridged tokens starting from Friday. The suspension will remain in effect until further notice.

This recent cessation follows a previous suspension of the affected tokens due to a problem with the Multichain (MULTI) protocol. On May 25, Binance had already suspended these tokens because transactions via the Multichain protocol were experiencing delays. Many transactions were stuck, leaving users without any updates from the protocol.

The affected tokens include Harvest Finance (FARM) via BSC, Travala (AVA) via ETH, Alchemy Pay (ACH) via BSC, and Polkastarter (POLS) via BSC. The others are SuperVerse (SUPER) via BSC, Alpaca Finance (ALPACA) via Fantom, Beefy.Finance (BIFI) via Fantom, and Spell Token (SPELL) via Avalanche C-Chain.

In a tweet on May 24, Multichain revealed: “some of the cross-chain routes are unavailable due to force majeure, and the time for service to resume is unknown.” Multichain also stated in the tweet that it will automatically credit pending transactions and compensate all affected users.

Market Reactions to Multichain Problem

At the time, a report stated that Binance was not the only crypto firm to react to Multichain. Blockchain analysis service Lookonchain reported MULTI outflows of $3 million. Additionally, a Fantom Foundation wallet address removed $2.4 million (449,740) of liquidity on SushiSwap.

Intelligence firm Arkham Intelligence also confirmed in a tweet that wallets moved around $3 million worth of MULTI tokens to the crypto exchange Gate.io. This move scared investors and caused MULTI’s price to drop by 26.5% in 24 hours. Arkham Intelligence’s tweet also mentioned a rumor that authorities in Shanghai have arrested the Multichain team.

Binance’s announcement states that all the mentioned tokens are still available via other networks supported on the exchange. According to data from CoinGecko, MULTI is currently trading at $3.13, experiencing a loss of 6.1% in the past 24 hours and 7.4% in the past week. MULTI’s 24-hour high is $3.34, with a 7-day high at $3.53.

Binance Multichain Suspension a Likely Move to Protect Funds and Avoid Regulatory Attention

Binance, the largest cryptocurrency exchange by volume, is facing regulatory pressure and is likely taking cautious steps with Multichain to prevent further issues. In May, Binance announced that it would suspend access to certain privacy coins in specific European countries to comply with EU regulations. XVG, DASH, NAV, MOB, and several others were named, and it was announced that they would no longer be available in Spain, Poland, Italy, and France. However, the exchange chose not to delist these tokens by reclassifying its assessment of privacy coins.

Outside of the EU, Binance is also encountering problems in Australia. In February, the Australian Securities and Investments Commission (ASIC) initiated an investigation against the exchange for the improper closure of some accounts. In April, the exchange requested the Australian ASIC to revoke its derivatives license granted through a local subsidiary. As a result of the revocation, Binance had to close all existing derivatives positions by April 21. According to a Bloomberg report, the ASIC conducted a raid on Binance’s office in Australia as of yesterday.

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