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Fantom Foundation Takes Legal Action Against Multichain for $122M Theft

source-logo  coinspress.com 06 March 2024 07:00, UTC

The Fantom Foundation has initiated legal action against the Multichain Foundation in Singapore's High Court, aiming to declare it bankrupt following the theft of $122 million from Multichain's Fantom bridge in July 2023.

Fantom secured a default judgment ruling on Jan. 30, alleging “breach of contract and fraudulent misrepresentations” by Multichain.

In response, Fantom plans to petition the court for Multichain Foundation’s winding up, with the intention of appointing a liquidator to recover and distribute missing assets. The liquidator would be empowered to manage Multichain’s assets and recover transactions for creditor repayment.

Although the court’s judgment pertains only to Fantom’s losses, Fantom aims to use this as precedent for all affected users to lodge claims. Fantom pledges to continue the legal process until a liquidator is appointed.

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Total losses from Multichain’s exploit are estimated at $210 million by blockchain security firm Beosin and Fantom. Multichain facilitated fund bridging across various blockchains, experiencing unauthorized withdrawals in July last year.

Fantom has actively pursued asset recovery since the exploit, filing reports with Singapore and China’s police and initiating legal action. Multichain’s co-founder, Zhaojun He, was arrested in May 2023, though his involvement remains unconfirmed.