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Fantom Foundation Pursues $112M Asset Recovery in Multichain Exploit Case

2 mins
Updated by Kyle Baird
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In Brief

  • Fantom seeks compensation for losses incurred due to assets depegging on Multichain in May 2023.
  • Fantom Foundation obtains a court ruling in their favor from Singapore, where Multichain is based.
  • Andre Cronje, Fantom Network's co-founder, admits being blindsided by network faults in July 2023.
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Fantom Foundation plans to submit a petition to the court, seeking the winding up of the Multichain Foundation and the appointment of a liquidator to assist in the recovery and distribution of frozen assets.

This action follows Fantom’s filing of a police report in Singapore, where Multichain is based, citing financial losses and breach of contract.

Fantom Seeks Compensation for Losses

According to a recent statement, in July 2023, an exploit on the Multichain bridge saw the depletion of over $210 million in assets across various chains. These include Fantom, Ethereum, BNB, Cronos, Polygon, Arbitrum, zkSync, Optimism, and Moonbeam.

However, approximately one-third of the total losses were attributed to Fantom’s ecosystem.

These losses piled on to other Multichain woes at the time, including the arrest of its CEO and subsequent delisting of eight of the ecosystem’s bridge tokens on the Binance crypto exchange.

In a recent statement, Fantom Foundation announced that a court ruling in Singapore, where Multichain is located, has favored Fantom.

“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 further elaborated that it sought legal counsel from attorneys in various countries. These included lawyers from the USA, China, Hong Kong, and Singapore to advise the course of action going forward.

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Multichain Attack in July 2023. Source: Hackernoon
Multichain attack overview from July 2023 shows $126M lost. Source: Hackernoon

However, with the court’s approval, the liquidator will now possess the necessary resources to assist in tracing and recovering assets.

“We will pass all our knowledge and investigative material to the liquidator and continue to work to facilitate and support their efforts of recovery,” the filing stated.

In July 2023, Fantom Network co-founder Andre Cronje stated that he was caught off guard by the network’s flaws.

Read more: What Are Algorithmic Stablecoins?

Cronje recognized the impact of the Multichain incident on Fantom. He showed his disappointment that the promises made by the Multichain team turned out to be false. The promises included decentralization, geolocation distribution, and access.

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Ciaran Lyons
Ciaran is a cryptocurrency journalist based in Sydney, Australia. He particularly enjoys writing about CBDC developments and the practical implementations of cryptocurrency in real-world scenarios. He has also appeared across major television networks in Australia including Channel Ten, Channel Nine and SBS TV. Prior to his foray into cryptocurrency, Ciaran worked as a presenter on national radio station Triple J.
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