Fantom Initiates Multichain Liquidation After 122M Dollars Exploit Loss

Crypto News- In a bold move, the Fantom Foundation is taking legal action against the Multichain Foundation, aiming to declare it bankrupt in the Singapore High Court. Their goal? To reclaim the staggering $122 million lost in a security breach last year from Multichain’s Fantom bridge.

According to a blog post dated March 4, Fantom revealed that the Singapore High Court had already granted them a default judgment against Multichain on January 30. Alleging “breach of contract and fraudulent misrepresentations,” Fantom is leveraging this legal victory to push for Multichain’s bankruptcy, a move they hope will facilitate the recovery of their substantial losses.

Fantom Initiates Multichain Liquidation After 122M Dollars Exploit Loss

The battle doesn’t end there. Fantom plans to petition the court to appoint a liquidator, similar to a Chapter 7 bankruptcy process in the U.S., to assist in retrieving and distributing the missing or frozen assets. While Fantom acknowledges the likelihood of Multichain’s reluctance to comply, they are prepared to escalate the situation if necessary.

If the court approves the liquidation, the appointed liquidator would wield significant authority, including the ability to seize Multichain’s assets, reverse transactions, and recover other owed assets to reimburse affected parties.

Despite the court’s judgment initially focusing on Fantom’s losses alone, Fantom intends to use this legal triumph as a precedent for all affected users to pursue their claims against Multichain. The road ahead promises further legal proceedings until a liquidator is formally appointed.

Multichain has yet to respond to requests for comment regarding the court’s ruling, leaving many stakeholders anxious for clarification and resolution.

Fantom vs. Multichain: Legal Showdown for 122M Dollars Recovery

The saga began in July 2023 when an exploit drained $210 million from Multichain, affecting users across multiple blockchains, including Fantom, Ethereum, and Polygon. Speculation arose about compromised administrator keys, with some suggesting an “inside job.” In response, Fantom launched a comprehensive recovery effort, involving legal action, police reports, and investigations spanning multiple jurisdictions.

The story takes a dramatic turn with the arrest of Multichain’s co-founder, Zhaojun He, on undisclosed charges two months before the exploit. While his recent activity on Telegram raises questions, his direct involvement remains unconfirmed.

As the legal battle unfolds, Fantom remains steadfast in its pursuit of justice and restitution for all affected parties, signaling a resolve to navigate the complexities of blockchain security and governance.