Fantom Foundation Update on Judgment Against Multichain

Fantom Foundation Update on Judgment Against Multichain

Today in Singapore, Judicial Commissioner Mohamed Faizal delivered his judgment against the Multichain Foundation, following an assessment of damages hearing held at the High Court of Singapore (the “Court”) on June 3, 2024, following the default judgment obtained against Multichain on January 30, 2024.

During that June 3rd hearing, the Court heard evidence from Eli Bernstein, Fantom Foundation's general counsel, and Miao Gu, a valuation expert from specialist firm Secretariat International. On the defendant’s side, Multichain's representatives were absent from the proceedings. In today’s judgment, the Court awarded Fantom US$2,187,870.55 for losses suffered. Among other determinations, the Judicial Commissioner stated:

The Claimant’s position is that the breach was possible because the CEO of the First Defendant had ultimate privileges and control over the cryptocurrency assets stored in the Multichain Bridge. The First Defendant had admitted as much in a public posting on Twitter (or X, as it is now known). This contravened what the Claimant contends to be the key term in the User Agreement, which stated that the Multichain Bridge was controlled by decentralised safe and secure MPC nodes that are incapable of one-person control.

Although this judgment only relates to Fantom's own losses, the purpose of the Foundation’s litigation was to bring about the winding up of Multichain and the appointment by the Court of a third-party liquidator — which Fantom Foundation will partially fund — to help recover and distribute missing or frozen assets for all parties affected by the Multichain exploit

We will continue to progress the matter until a liquidator is appointed, which we anticipate will occur in the coming months, and we will pass all our knowledge and investigative material to the liquidator to facilitate and support their recovery efforts.  The liquidator will then go through an independent assessment of assets followed by claims, recovery, and distribution processes.

Nicolas Tang of Farallon Law, who along with Ashviniy Narenthiren represented Fantom Foundation in this case, stated today:

“We are thrilled with the High Court decision, which represents a significant victory not just for our client, but for the entire cryptocurrency community. This ruling reinforces the legitimacy and legal standing of digital assets, ensuring a fair and just environment for innovation and growth in this rapidly evolving sector. We remain committed to advocating for the rights of our clients and the broader industry as we continue to navigate the complexities of obtaining justice in the cryptocurrency world.”