The team of the non-profit Fantom Foundation filed a petition to the court to liquidate the Multichain organization. According to representatives, the latter’s management violated the contract, which led to Fantom’s losses of $122 million.
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
The Fantom Foundation is going to apply to the Supreme Court of Singapore with a request to liquidate the Multichain organization. The reason was a hacking of the protocol, which resulted in the project losing $122 million.
Fantom Demands Compensation of $122 Million
In July 2023, the Multichain protocol was hacked. During the hack, the attackers stole crypto assets totaling $210 million. About a third of all losses occurred in the Fantom ecosystem.
According to the fund team, on January 30, the Singapore Supreme Court had already ruled in favor of Fantom in a lawsuit against Multichain “for breach of contract and misrepresentation.” The organization now wants the regulator to appoint a Multichain liquidator who will help Fantom recover and distribute the frozen assets.
“Over the next few months, we will progress the case until a liquidator is appointed,” the fund’s management promised.
The organization also said it had filed a police report in China. There, the team says, the Multichain protocol and its founder are “under active investigation.”
Previously, a security expert saved Fantom from a $170 million hack. He discovered a vulnerability that remained in the protocol after an October attack on the project’s hot wallet. The analyst was rewarded for his attentiveness and conscientious work – the team paid him $1.7 million.
Multichain Fraud
Almost immediately after the attack on Multichain, Chainalysis analysts suggested that the hack could have been supervised by the head of the project. Zhao Jun disappeared from the sight of his own employees back in May 2023 – since then, no one from the team has been able to contact him. Experts clarified that the hack was caused by the theft of the administrator’s private keys.
A few days later, Multichain confirmed that Jun was involved in the incident. The developers of the protocol said that Chinese law enforcement officers arrested the founder at the same time, in May. According to them, the entire project infrastructure was tied to the founder’s accounts. This is what paralyzed the work of Multichain after its disappearance.
The version of fraud was voiced by Fantom CEO Michael Kong. He emphasized that the withdrawal of funds from the wallets of the hacked protocol was not like a regular hacker attack.
