The Fantom (FTM) Foundation has taken decisive steps to recover assets lost in the Multichain exploit that devastated various chains, including its own, resulting in a staggering $210 million loss.
After failed attempts to engage with the Multichain Foundation, the Protocol has announced that it filed a lawsuit for “breach of contract” and “fraudulent misrepresentations.”
Fantom Foundation Takes Legal Action Against Multichain
The exploit, which occurred in July 2023, targeted the Multichain bridge and affected multiple chains, including Fantom, Ethereum (ETH), Binance’s BNB, Cronos (CRO), Polygon (MATIC), Arbitrum (ARB), zkSync, Optimism (OP), and Moonbeam (GLMR).
Fantom’s ecosystems suffered losses of approximately one-third of the total damage. In addition, the Fantom Foundation claims that the recovery process has faced numerous challenges due to legal complexities, jurisdictional issues, uncooperative former directors, and ongoing police investigations.
To pursue justice, the Fantom Foundation initiated several measures. They filed a police report in Singapore, where the Multichain Foundation is incorporated, and in Kunming, China, where Multichain and its founder are under investigation.
Legal counsel was engaged in the United States, China, Hong Kong, and Singapore to navigate the diverse jurisdictions involved. Additionally, Fantom partnered with the blockchain intelligence firm TRM Labs to conduct a comprehensive forensic analysis of the asset flow. As a decisive move, legal action against the Multichain Foundation for losses incurred by Fantom was commenced in Singapore.
Empowered To Liquidate Multichain
The Fantom Foundation has also disclosed that a recent default ruling by Judge Tan Boon Heng of the General Division of the High Court of Singapore has ruled in favor of the Protocol’s claim.
According to the foundation’s blog post, the ruling paves the way for the protocol to petition the court to dissolve the Multichain Foundation and appoint a court-appointed liquidator.
The liquidator, equipped with specialized expertise, legal powers, and authority to act on behalf of Multichain, will reportedly assist in the tracing, recovering, and distributing of missing or frozen assets.
However, it is worth noting that while the current ruling addresses explicitly the Fantom Foundation’s losses, it sets an important precedent for all affected users to pursue their claims against Multichain.
Ultimately, the Foundation intends to use this legal victory to facilitate the appointment of “suitably qualified” experts to recover and distribute assets on behalf of all creditors. This milestone marks a significant step forward in the ongoing legal saga and underscores the team’s approach to righting the wrongs caused by the exploit.
Riding The Bull Market
Despite the ongoing legal battle faced by the protocol, its native token, FTM, has experienced significant gains across all time frames, taking advantage of the current bullish sentiment in the overall market.
In the year-to-date period, the FTM token has recorded a remarkable increase of 67%, followed by gains of over 92% in the past thirty days. Furthermore, in the past seven and fourteen days alone, the token has seen gains of 50% and 57%, respectively.
This continuous upward trend propelled FTM to reach a 20-month high of $0.751 on Monday. However, it has since retraced and is trading for $0.681, with a modest recovery of 1.8% in the past few hours.
Featured image from Shutterstock, chart from TradingView.com