Multichain to Wind up as Fantom Seeks Recovery of Missing or Frozen Assets

Fantom Foundation, a blockchain platform for decentralised finance has revealed on its blog that it intends to ask the court to dissolve Multichain Foundation in order to retrieve funds that have gone missing.

Fantom stated that the $210 million that was stolen from the cross-chain protocol Multichain bridge in July of last year is approximately equivalent to the amount that its ecosystem lost.

Over $210 million worth of assets from several chains, including Fantom, Ethereum, BNB, Cronos, Polygon, Arbitrum, zkSync, Optimism, and Moonbeam, were depleted in July 2023 as a result of an exploit on the Multichain bridge. 

Following the failure of Fantom’s attempts to communicate with the Multichain Foundation’s key personnel and previous directors, Fantom had filed a lawsuit against the Multichain Foundation alleging fraudulent misrepresentations and breach of contract for losses incurred. 

According to the article, Fantom filed a lawsuit against Multichain in January, alleging fraudulent misrepresentations and breach of contract. The High Court of Singapore rendered a default judgement in favour of Fantom.

With the default judgement verdict in Fantom’s lawsuit, other Multichain users may be able to claim lost assets. A total of $210 million was lost as a result of Multichain’s vulnerability over several chains, including BNB, Ethereum, Polygon, and Arbitrum. Fantom stated, “An ongoing investigation is underway in Kunming, China, regarding its founder.”

The popular DeFi platform has extended an invitation to impacted users to participate in a proposed class action lawsuit against Multichain.

As per Fantom, “Given the recent ruling, we will use the Fantom Foundation’s own financial losses to petition the court to wind up the Multichain Foundation and appoint a liquidator (equivalent to a Chapter 7 bankruptcy in the US)  to help recover and distribute missing or frozen assets.”  

With this legal win, the Singaporean court is anticipated to name a liquidator who will evaluate Fantom’s losses as a result of Multichain’s security breach and assist in finding and allocating the frozen or lost assets.

Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.

Leave a Reply