The Fantom Foundation is taking legal action to try to recover funds lost in last year’s $122 million exploit of the Fantom bridge operated by Multichain. Fantom announced on March 4 that it had obtained a default judgment ruling from the Singapore High Court against Multichain for breach of contract and fraudulent misrepresentations related to the July 2023 incident.
With this ruling in hand, Fantom now plans to petition the court to declare Multichain bankrupt and appoint a liquidator. A liquidator would have broad powers to take control of Multichain’s assets, claw back transactions, and work to recover funds to repay creditors like Fantom.
“We will use the Fantom Foundation’s own financial losses to petition the court to wind up the Multichain Foundation and appoint a liquidator to help recover and distribute missing or frozen assets,” Fantom stated.
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The $122 million loss represented funds drained from the Fantom bridge, which allowed users to transfer assets between the Fantom blockchain and other networks like Ethereum and Polygon. The incident was part of a larger $210 million exploit that impacted Multichain’s cross-chain bridge services.
While the current Singapore ruling only relates to Fantom’s specific losses, the foundation said it aims to “pave a path for all users to lodge their claims against Multichain” through this legal process over the coming months.
Blockchain security firms alleged the Multichain exploit may have been an inside job facilitated by compromised admin keys. However, Multichain has not publicly commented on the new court ruling or Fantom’s bankruptcy pursuit.
The Fantom bridge hack was one of the largest cryptocurrency heists of 2023 and highlighted persistent security vulnerabilities in cross-chain bridging services. As this recent legal escalation shows, the fallout from such incidents can be prolonged as victims fight to try to recover lost funds.