A significant legal victory was achieved by Sonic Labs when the Singapore High Court ruled in its favor, allowing the company to initiate the winding up of the Multichain Foundation. This decision comes in the wake of a major hack in 2023 that resulted in substantial financial losses for users across multiple blockchain platforms.
Key Takeaways
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Sonic Labs, previously known as the Fantom Foundation, has been granted permission to wind up the Multichain Foundation.
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The ruling was made by Justice Kwek Mean Luck on May 9, 2025, in the Singapore Supreme Court.
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Liquidators from KPMG have been appointed to oversee the process of recovering lost funds.
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The Multichain Foundation suffered a hack in July 2023, leading to losses estimated at over $210 million.
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Sonic Labs aims to recover funds for victims of the hack through this legal action.
Background of the Case
In July 2023, the Multichain Foundation experienced a catastrophic security breach that resulted in the loss of assets across various blockchain networks, including Fantom, Ethereum, BNB, Cronos, and Polygon. The incident was characterized by unusually large outflows, which were later confirmed to be the result of a hack. According to estimates from blockchain security firm Beosin and Fantom, the total losses across all affected chains exceeded $210 million.
Following the hack, Sonic Labs initiated legal proceedings against the Multichain Foundation, citing breach of contract and fraudulent misrepresentations. In January 2024, the Singapore High Court granted a default judgment in favor of Sonic Labs, which claimed that Multichain had lost $122 million of its funds.
The Court's Decision
On May 9, 2025, Justice Kwek Mean Luck ruled that the Multichain Foundation should be declared bankrupt and appointed KPMG as liquidators to manage the winding-up process. Sonic Labs CEO Michael Kong expressed that the decision was necessary due to the uncooperative behavior of former Multichain employees, who allegedly concealed information from victims of the hack.
Kong stated, "Going forward, the liquidators can now start working with other parties to initiate the process of trying to acquire funds that should eventually be returned to users if those legal proceedings are successful."
Implications for Victims
The ruling allows Sonic Labs to leverage its legal victory to assist other victims of the Multichain hack in filing claims for their losses. The appointment of liquidators is expected to facilitate the recovery and distribution of missing or frozen assets, akin to a Chapter 7 bankruptcy process in the United States.
Multichain's Operational Challenges
The Multichain Foundation faced significant operational challenges following the hack, leading to its eventual shutdown in July 2024. The situation was exacerbated by the detention of its CEO, Zhaojun, by Chinese authorities, which further complicated the foundation's ability to recover from the financial fallout.
As the legal proceedings unfold, the focus remains on the recovery of funds for the victims of the hack, with Sonic Labs taking a proactive stance in ensuring that justice is served and that affected users are compensated for their losses.
Sources
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Sonic Labs wins judgment for Multichain Foundation to wind up, StartupNews.fyi.
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Sonic Labs wins judgment for Multichain Foundation to wind up, Cointelegraph.
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