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Fantom Foundation's Legal Victory: A Step Towards Justice in the Multichain Saga

source-logo  blockster.com 05 March 2024 07:28, UTC

In the tumultuous world of cryptocurrency, security breaches and exploits are unfortunately not uncommon. Such was the case in July 2023, when an exploit on the Multichain bridge resulted in the depletion of over $210 million in assets across various chains, including prominent ones like Fantom, Ethereum, BNB, Cronos, Polygon, Arbitrum, zkSync, Optimism, and Moonbeam.

The repercussions of this breach were widespread, with Fantom's ecosystem alone bearing the brunt of approximately one-third of the total losses. Despite the severity of the incident, efforts to engage with the former directors and key personnel of the Multichain Foundation proved fruitless.

With little cooperation forthcoming, Fantom Foundation took decisive action, filing a legal suit against the Multichain Foundation for breach of contract and fraudulent misrepresentations. This move was prompted by the Foundation's unwavering commitment to protecting its community and seeking redress for the losses sustained.

After months of legal proceedings and exhaustive efforts to pursue justice, Fantom Foundation received a significant development in its favor. On January 30, 2024, 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. This ruling, which took effect as of November 30, 2023, marks a crucial milestone in the Foundation's quest for accountability and restitution.

It's important to understand the broader context within which Fantom Foundation's legal battle unfolded. While the Foundation is not liable for the actions of third-party infrastructure partners, it nonetheless took proactive measures to address the aftermath of the exploit.

This included engaging legal counsel in multiple jurisdictions, partnering with blockchain intelligence firms for forensic analysis, and filing police reports in Singapore and Kunming, China, where the Multichain Foundation and its founder are subject to active investigations.

Looking ahead, Fantom Foundation intends to leverage its recent legal victory to further its pursuit of justice.
The Foundation plans to petition the court to wind up the Multichain Foundation and appoint a liquidator to aid in the recovery and distribution of missing or frozen assets.
This process, akin to Chapter 7 bankruptcy proceedings in the United States, will empower a court-appointed liquidator with the necessary authority and expertise to trace, recover, and distribute assets in the interests of all creditors.

While the recent judgment pertains specifically to Fantom Foundation's losses, the Foundation is committed to using this legal precedent to facilitate similar actions on behalf of all affected users. Over the coming months, Fantom Foundation will continue to cooperate with authorities and stakeholders, ensuring that the pursuit of justice remains steadfast and unwavering.

As the saga unfolds, the Foundation remains resolute in its mission to safeguard the interests of its community and uphold the integrity of the blockchain ecosystem.