Fantom partnered with blockchain intelligence company TRM Labs to conduct comprehensive asset flow forensics. As a decisive step, legal action was initiated in Singapore against the Multichain Foundation for the losses suffered by Fantom.
The Fantom Foundation (FTM) has taken decisive action to recover assets lost in the Multichain exploit that devastated several chains, including its own, resulting in a staggering loss of $210 million.
In a March 4 blog post, Fantom said the Singapore High Court granted it a default judgment on Jan. 30 in its legal action against cross-chain protocol Multichain for “breach of contract and fraudulent misrepresentations” after Fantom claimed that Multichain lost $122 million of its funds in July 2023 due to an exploit.
“Given the recent ruling, we will use the Fantom Foundation’s own financial losses to ask the court to liquidate the Multichain Foundation and appoint a liquidator (equivalent to a Chapter 7 bankruptcy in the US) to help recover and distribute assets lost or frozen,” Fantom stated.
Fantom Foundation Takes Legal Action against Multichain
The exploit, which occurred in July 2023, targeted the Multichain bridge and affected multiple chains including Fantom, Ethereum (ETH), Binance’s BNB, Cronos (CRO), Polygon (MATIC), Arbitrum (ARB), zkSync, Optimism (OP). and Moonbeam (GLMR).
Fantom’s ecosystems suffered losses of approximately one-third of the total damage. Additionally, the Fantom Foundation claims that the recovery process has faced numerous challenges due to legal complexities, jurisdictional issues, uncooperative former directors, and ongoing police investigations.
To seek justice, the Fantom Foundation initiated several measures. They filed a police report in Singapore, where the Multichain Foundation is incorporated, and in Kunming, China, where Multichain and its founder are under investigation. Legal counsel was retained in the United States, China, Hong Kong and Singapore to navigate the various jurisdictions involved.
Power to Liquidate Multichain
The Fantom Foundation has also revealed that a recent default judgment by Justice Tan Boon Heng of the General Division of the Singapore High Court ruled in favor of the Protocol claim. According to the foundation’s blog post, the ruling paves the way for the protocol to ask the court to dissolve the Multichain Foundation and appoint a court-appointed liquidator.
The liquidator, armed with specialized experience, legal powers and authority to act on behalf of Multichain, will reportedly assist in the tracing, recovery and distribution of missing or frozen assets. However, while the current ruling explicitly addresses the Fantom Foundation’s losses, it sets an important precedent for all affected users to bring their claims against Multichain.
Ultimately, the Foundation intends to use this legal victory to facilitate the appointment of “suitably qualified” experts to recover and distribute assets on behalf of all creditors. This milestone marks an important step forward in the ongoing legal saga and underlines the team’s focus on fixing the bugs caused by the exploit.
Riding the Bull Market
Despite the ongoing legal battle facing the protocol, its native token, FTM, has seen significant gains across all time frames, capitalizing on the current bullish sentiment in the broader market.
So far this year, the FTM token has recorded a notable 67% surge, followed by gains of over 92% in the last thirty days. Furthermore, in the last seven and fourteen days alone, the token has seen gains of 50% and 57%, respectively.
This continued bullish trend propelled FTM to reach a 20-month high of $0.751 on Monday. However, it has since retreated and is trading at $0.681, with a modest 1.8% recovery in recent hours.
By Audy Castaneda
