Source: Cointelegraph
Original: “Sonic Labs Wins Judgment, Orders Liquidation of Multichain Foundation”
The Singapore High Court has ruled in favor of Sonic Labs' application to force the Multichain Foundation into liquidation to recover funds stolen in a 2023 hacking incident.
In a ruling on May 9 by the Singapore Supreme Court, Judge Kwek Mean Luck approved Sonic Labs' (formerly known as the Fantom Foundation) application, declaring Multichain bankrupt and appointing a liquidator from global audit, tax, and consulting firm KPMG to take over the affairs.
Sonic Labs CEO Michael Kong stated in a release on the X platform on May 14 that as the team behind the first-layer Sonic blockchain, they had no choice but to file a lawsuit to force the liquidation of Multichain, as its former employees "completely refused to cooperate" and "concealed the truth from the victims."
"In the future, the liquidator can begin working with other relevant parties to initiate the process of recovering funds, and if these legal actions are successful, the funds will ultimately be returned to the users," Kong said.
In July 2023, the Multichain Foundation experienced an unusually large outflow of funds, later confirmed to be a hacking incident, resulting in asset losses across multiple blockchains, including Fantom, Ethereum, BNB, Cronos, and Polygon.
A report jointly released by blockchain security firm Beosin and Fantom in August 2023 estimated that the total losses across all chains amounted to at least $210 million.
In January 2024, the Singapore High Court issued a default judgment in favor of Sonic Labs in its legal action against Multichain for breach of contract and fraudulent misrepresentation, after Fantom claimed that the cross-chain protocol led to a loss of $122 million in funds.
Following the judgment, Sonic Labs announced in March 2024 that it would leverage this legal victory to petition the court for the liquidation of the Multichain Foundation and the appointment of a liquidator, akin to a Chapter 7 bankruptcy proceeding in the U.S., to assist in recovering and distributing lost or frozen assets.
Previously, Sonic Labs had indicated plans to use this legal victory to open up channels for claims for other victims of the Multichain hacking incident.
Due to a shortage of operating funds and the detention of its CEO Zhaojun by Chinese police, Multichain announced its closure in July 2024.
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