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Fantom Seeks Money Back From Multichain’s $200M Exploit

source-logo  coindesk.com 05 March 2024 07:20, UTC

Fantom Foundation is taking legal action to recover assets lost in the $200 million Multichain exploit by seeking to wind up the Multichain Foundation.

Fantom plans to use its January legal victory in Singapore to pave the way for all users to claim their losses.

Fantom Foundation, which maintains and helps develop the Fantom blockchain, is seeking to claw back some of the assets it lost in a $200 million exploit of cross-chain router protocol Multichain in July.

The foundation, which said it won a default judgment in Singapore in January when Multichain failed to respond, is now seeking to liquidate the company, a process that's equivalent to a Chapter 7 bankruptcy in the U.S., so that any assets can be recovered and distributed.

“While the current judgment relates only to Fantom Foundation’s own losses, the Foundation plans to use this legal victory to pave a path for all users to lodge their claims against Multichain,” Fantom said in a Monday post.

Fantom noted its losses amounted to one-third of the amount stolen from Multichain. Other lost assets were spread across different blockchains, including Fantom, Ethereum and BNB Chain.

Multichain was a bridging protocol that let users transfer tokens between different blockchains. The hack in July came days after its CEO went missing, its technology was failing, and certain nodes that ensured the platform's security were changed.

Fantom had previously filed an action against the Multichain Foundation for breach of contract and fraudulent misrepresentations for losses sustained. While it has no legal right to recover funds on behalf of users, it said the legal proceedings will allow users and victims to take a similar course of action for recovery.

Fantom’s FTM tokens were up as much as 22%, before retreating, in the past 24 hours. They were recently down 2.17%, while the CoinDesk 20 Index, a gauge of the broader crypto market, was up 3.57%.