Daniel Walker
Sonic Labs, the blockchain company formerly known as Fantom Foundation, has received the green light from the High Court of Singapore to initiate the liquidation of the Multichain Foundation, marking a significant step toward recovering losses from a 2023 security breach.
In a court decision dated May 9, Justice Kwek Mean Luck authorized Sonic Labsโ request to wind down Multichain. The ruling also appointed KPMG Singapore as joint liquidators to oversee the dissolution process.
Multichain Collapse Triggered by $210M Exploit
The legal action stems from a massive hack in July 2023, where Multichain suffered losses totaling $210 million, impacting numerous users and protocols. Sonic Labs was among the largest victims, with approximately one-third of the total stolen funds attributed to its holdings.
Sonic Labs filed its initial motion for liquidation in March last year, citing contractual violations and fraudulent misrepresentation by Multichain. These legal claims were later upheld by the Singapore court.
Multichainโs Silence Sparks Legal Action
According to Sonic Labs, the unresponsiveness of Multichain leadership played a key role in the decision to pursue court-ordered liquidation. Despite repeated outreach attempts, Multichain executives failed to engage, with CEO Zhaojun He having been detained by Chinese authorities months prior to the hackโand has remained missing from the public eye since.
In a statement shared on X (formerly Twitter), Sonic Labs CEO Michael Kong expressed frustration over the prolonged legal ordeal:
โHad Multichain engaged with its victims, this entire situation couldโve been resolved much sooner. Weโve lost more than a year due to their absence,โ Kong said.
Hope for Recovery: Users Could Reclaim Lost Assets
Kong also noted that the liquidation process could lead to the recovery and redistribution of stolen assets. If the appointed liquidators are able to coordinate with involved parties, thereโs potential for victims to receive compensation.
Sonic Labs has emphasized that this legal precedent may also create a framework for other affected users to pursue similar claims against Multichain.
