The Fantom (FTM) Foundation has taken decisive steps to recover assets lost in the Multichain exploit that destroyed several chains, including its own, resulting in a staggering $210 million loss.
After failed attempts to engage with the Multichain Foundation, the Protocol did so announced that it has filed a lawsuit for “breach of contract” and “fraudulent misrepresentations.”
Fantom Foundation is taking legal action against Multichain
The exploit, that took place in July 2023focused on 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 about a third of the total damage. Additionally, 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.
In pursuit of justice, the Fantom Foundation has taken several measures. They have filed police reports in Singapore, where the Multichain Foundation was founded, 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 explore the various areas of law involved. In addition, Fantom partnered with blockchain intelligence firm TRM Labs to conduct a comprehensive investigation forensic analysis of the asset flow. In a decisive step, legal action was taken in Singapore against the Multichain Foundation due to losses suffered by Fantom.
Authorized to liquidate Multichain
The Fantom Foundation also announced that a recent standard judgment by Justice Tan Boon Heng of the General Division of the High Court of Singapore found in favor of the Protocol’s claim.
According to the foundation’s blog post, the ruling paves the way for the protocol to request the court to dissolve the Multichain Foundation and establish a liquidator appointed by the court.
The trustee, equipped with specialized expertise, legal powers and authority to act on behalf of Multichain, will reportedly assist in locating, recovering and distributing missing or frozen assets.
However, it is worth noting that while the current ruling explicitly addresses the Fantom Foundation’s losses, it constitutes an important finding precedent for all affected users to pursue their claims against Multichain.
Ultimately, the Foundation plans 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 underlines the team’s approach to correcting the wrongs caused by the exploit.
Riding the bull market
Despite the ongoing legal battles facing the protocol, the parent token, FTM, has posted significant gains across all timeframes, taking advantage of the current bullish sentiment in the overall market.
Year to date, the FTM token has recorded a remarkable 67% increase, followed by gains of over 92% in the last thirty days. Furthermore, the token has posted gains of 50% and 57% respectively in the last seven and fourteen days alone.
This continuously rising caused FTM to reach a 20-month high of $0.751 on Monday. However, it has since bounced back and is trading at $0.681, with a modest recovery of 1.8% in recent hours.
Featured image from Shutterstock, chart from TradingView.com
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