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Prior to taking legal action against Multichain, Fantom had attempted to engage with the protocol’s former directors and key personnel.
The Fantom Foundation, a non-profit organization overseeing the decentralized finance (DeFi) platform, is preparing to file a petition at the Singapore High Court to liquidate the Multichain Foundation.
The move is aimed at recovering part of the funds stolen during an exploit on the Multichain bridge in July last year, which saw cybercriminals steal approximately $210 million from various Web3 protocols, including Fantom, Ethereum, BNB, Cronos, Polygon, Arbitrum, zkSync, Optimism, and Moonbeam.
However, Fantom said it owns one-third of the total funds amounting to approximately $70 million, and is looking to recover the assets to return to the victims.
Fantom Wins Default Judgment against Multichain
In a blog post on March 4, 2024, Fantom said it has been granted a default judgment against Multichain (MULTI) after filing a lawsuit against the platform for breach of contract and fraudulent misinterpretation of losses following the hack.
“We are pleased to announce that on January 30, 2024 (effective as of November 30, 2023), the Honorable Registrar Tan Boon Heng of the General Division of the High Court of Singapore granted a default judgment ruling in Fantom’s favor,” Fantom said.
In light of the recent ruling, the non-profit organization said its next move is to use its financial losses to petition the Singapore High Court to declare the Multichain Foundation bankrupt. Once the platform has been pronounced insolvent, the court will appoint a liquidator to help in the recovery and distribution process.
Recovering the Stolen Assets
Fantom explained that the court-appointed liquidator will have the knowledge and skills needed to track down and recover the stolen assets.
They will also possess unique legal authority, including the power to reclaim or dispose of property, reverse fraudulent transactions, launch investigations, and represent the interests of Multichain in legal matters.
Additionally, the liquidator is obligated to act in the best interests of all creditors and has the authority, mandated by the court, to communicate with issuers, exchanges, or third parties on behalf of the Multichain Foundation.
Righting the Wrongs
Fantom also disclosed that while the default judgment only applies to the losses it incurred during the hack, the non-profit organization is prepared to use the victory to pave a path for other chains affected by the exploit to lodge their claims against Multichain.
The foundation views the legal triumph as an “important milestone” in its efforts to address the consequences of the exploit. It also sees it as validation of the team’s strategy and diligence in recovering the assets.
Prior to taking legal action against Multichain, Fantom had attempted to engage with the protocol’s former directors and key personnel. Unfortunately, these efforts were met with non-cooperation, leading to the lawsuit.
Fantom stated that it also filed a police report in Singapore, where the Multichain Foundation is incorporated, as well as in Kunming, China, where Multichain and its founder are currently under investigation. These actions were taken to ensure that users can recover part of their stolen assets.
