Ruling in Fantom’s Favour Against Multichain
Fantom Foundation has been awarded a default judgement against Multichain Foundation by the Honourable Registrar Tan Boon Heng of the General Division of the High Court of Singapore. This judgement, effective as of November 30, 2023, follows extensive efforts by Fantom to seek redress for losses incurred due to an exploit on the Multichain bridge in July 2023.
The Exploit and Its Impact
On 6 July 2023, the exploit, which affected multiple chains including Fantom, Ethereum, BNB, Cronos, Polygon, Arbitrum, zkSync, Optimism, and Moonbeam, resulted in the depletion of over $210 million in assets. Fantom's ecosystem alone suffered losses amounting to approximately one-third of the total losses, totaling a staggering $130 million. This incident highlighted the vulnerability of even established platforms in the cryptocurrency space.
Legal Action and Recovery Efforts
Following unsuccessful attempts to engage with Multichain Foundation's former directors and key personnel, Fantom pursued legal action citing breach of contract and fraudulent misrepresentations. The Foundation's management and legal team, operating across multiple jurisdictions including the US, China, and Singapore, embarked on an extensive investigation and legal proceedings to address the exploit.
Fantom filed police reports in Singapore and Kunming, China, engaged legal counsel in various jurisdictions, partnered with a leading blockchain intelligence firm for forensic analysis, and commenced legal action against Multichain Foundation in Singapore. The recent default judgement ruling signifies a crucial milestone in Fantom's efforts to recover assets and hold Multichain accountable for the damages incurred.
Petition for Bankruptcy and Liquidation
With the default judgement in hand, Fantom plans to petition the court to declare Multichain Foundation bankrupt. This strategic move aims to facilitate the appointment of a liquidator, equivalent to a Chapter 7 bankruptcy in the US, to aid in asset recovery and distribution. The liquidator, equipped with specialised expertise and legal powers, will play a pivotal role in tracing and recovering missing or frozen assets.
User Participation and Future Refunds
Affected users are encouraged to participate in the ongoing legal proceedings, including the class-action lawsuit, to secure eligibility for potential refunds. Participation in the lawsuit and active engagement in the legal process are essential for users seeking recourse in the aftermath of the exploit. Fantom emphasises the importance of timely action to safeguard the interests of all stakeholders involved.
Pursuing Justice and Recovery
The default judgement ruling against Multichain Foundation represents a significant step towards seeking justice and recovery for the damages inflicted by the exploit. While this ruling pertains to Fantom Foundation's own losses, it sets a precedent for all users affected by the exploit to lodge their claims against Multichain. Fantom remains committed to progressing the legal proceedings, facilitating asset recovery efforts, and supporting affected users throughout the process.
Navigating Uncertainty and Recovery
This situation highlights the complexities and risks associated with the nascent cryptocurrency space. While the judgement against Multichain is a win for Fantom, the path to full recovery for users remains uncertain. The upcoming bankruptcy proceedings and potential class-action lawsuit present opportunities for users to recoup their losses, but the process is likely to be lengthy and complex. This case reflects the need for robust security measures and clear legal frameworks to mitigate risks and protect users in the evolving world of decentralised finance.