Fantom (FTM) Sheds 10% Following Multichain Bridge “Withdrawals”

July 7, 2023

Fantom (FTM) price has been experiencing a dip in the past few days. This fall appears to have worsened in the last 24 hours due to FUD (fear, uncertainty, and doubt) spreading amongst investors.

CoinGecko data shows that the FTM token has lost 10.3% of its value in the last 24 hours. This price plunge has been linked to the movement of crypto assets from Multichain’s Fantom bridge to separate wallet addresses.

FTM Price Declines Amidst “Abnormal” Withdrawals From Multichain Bridge

There has been some uncertainty surrounding the Fantom network lately due to the “abnormal” movement of funds from its Multichain bridge – a cross-chain bridging protocol that enables the transfer of assets between different blockchains.

On July 6, over $100 million worth of crypto assets were withdrawn from Multichain’s Fantom bridge. On-chain data reveals that 7,214 Wrapped Ether (WETH) tokens (worth $13.6 million), 1,024 Wrapped Bitcoin (WBTC) (equivalent to $31 million), and $58 million worth of US Dollar Coin (USDC) were removed from the network’s multichain bridge.

Furthermore, the movement of funds from bridges of other blockchains has also been reported. Notably, Dogechain saw the withdrawal of more than $600,000 in USDC from its bridge. In addition, $4.8 million of USDC and $1 million worth of Tether (USDT) were withdrawn from Multichain’s Moonriver bridge.

Although Multichain operates on other blockchains, it is understood that the Fantom blockchain is particularly reliant on the cross-chain protocol. According to trading firm Thanefield, nearly 40% of crypto assets on Fantom (excluding its native FTM tokens) made it to the blockchain through Multichain’s bridges.

The price of FTM has been on a decline since these on-chain activities came under focus. As of this writing, the FTM token trades at $0.269819, losing more than 10% of its value in the past day.

Fantom Spreads Calm Amidst Fears Of Exploit

In the early hours of today, Multichain took to Twitter to address these “abnormal” withdrawals, imploring its users to suspend the use of its platform. The protocol claims not to know what happened but assured its users that an investigation is ongoing.

The lockup assets on the Multichain MPC address have been moved to an unknown address abnormally.
The team is not sure what happened and is currently investigating.

It is recommended that all users suspend the use of Multichain services and revoke all contract approvals…

— Multichain (Previously Anyswap) (@MultichainOrg) July 6, 2023

This announcement comes after speculations of exploitation by the general online population. Specifically, security firm PeckShield tagged the Multichain team in a tweet, asking the protocol to look at Fantom bridge transactions. Five hours after its initial tweet, the security firm then said “It seems the hack is confirmed.”

It is worth noting that Multichain has been going through unspecified technical problems in the past few months. In May, the protocol’s team announced that it had lost contact with its CEO and was experiencing multiple issues due to unforeseeable circumstances.

That said, Fantom has released a couple of statements on Twitter to address the issue. “We are aware of a situation unfolding on the Multichain bridge. We are actively evaluating the circumstances and will provide an update as soon as we have more to share,” the first tweet read.

In another tweet, the network assured users that the FTM token was never issued or managed by Multichain. This means that WFTM (Wrapped Fantom), FTM ERC-20, and FTM on the Opera Mainnet are unaffected.