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Fantom Foundation Seeks Retrieval of Assets Lost in Multichain Exploit

source-logo  coinedition.com 05 March 2024 08:26, UTC

The Fantom Foundation, the organization associated with the Layer 1 blockchain Fantom, recently shared insights on its efforts to recover funds lost in a major exploit of Multiflow last year. The Fantom Foundation filed a lawsuit against Multichain Foundation, to which the Honorable Registrar Tan Boon Heng of the General Division of the High Court of Singapore responded by granting a default judgment ruling on January 30.

Since the July 2023 Multichain exploit, Fantom Foundation’s management and legal team have been working tirelessly across multiple jurisdictions to chart a path forward that enables victims to partially recover assets lost. We have an important update in this regard.

After all… pic.twitter.com/pUxyalPdMD

— Fantom Foundation (@FantomFDN) March 4, 2024

In July 2023, Multichain experienced a mysterious outflow of $125 million in multichain assets from its cross-chain protocol. The withdrawals were made by unauthorized addresses in a suspected massive rug pull or hack by insiders. As these assets were largely from Multichain’s Fantom Bridge, amounting to $122 million, the Fantom Foundation accused Multichain of “breach of contract and fraudulent misrepresentations for losses sustained by the Foundation.”

According to its latest X post, the Fantom Foundation requested the court to appoint a liquidator “to help recover and distribute missing or frozen assets.” The platform expects the court-appointed liquidator to aid in “tracing and recovering assets.” In addition, if appointed, the liquidator will have unique legal powers, including “the authority to retrieve or dispose of property, claw back fraudulent transactions, commence investigations, and bring or defend legal actions, among others.”

The Fantom Foundation shared its journey over the past months after the exploit, including its cooperation with a police investigation into Multichain and its co-founder Zhaojun He. Further, The Fantom Foundation sought assistance from the blockchain intelligence firm TRM “to conduct a forensic analysis of the flow of assets.” In addition to legal action, the Foundation has consulted with legal counsel in the USA, China, Hong Kong, and Singapore for advice.

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