Fantom Foundation Proposes Multichain Compensation of $65M

Since the $210 million leak from Multichain in July 2023, the legal team at Fantom has been working tirelessly to recover the affected company’s funds. Recently, the Fantom Foundation provided some new updates on the ongoing events.

As reported on X, Fantom stated that despite numerous attempts to contact former Directors and key personnel of the Multichain Foundation, they were unsuccessful. Fantom was forced to take legal action against Multichain for breach of contract and fraud, resulting in losses that Fantom had to bear.

Since the July 2023 Multichain exploit, Fantom Foundation’s management and legal team have been working tirelessly across multiple jurisdictions to chart a path forward that enables victims to partially recover assets lost. We have an important update in this regard.

After all… pic.twitter.com/pUxyalPdMD

— Sonic Labs (prev. Fantom) 💥 (@0xSonicLabs) March 4, 2024

On January 30, 2024, the Singapore Supreme Court issued a favorable preliminary ruling for the organization. The court will work in the coming months to assess the damages caused by Multichain and issue compensation requests. It is understood that Fantom will request a cross-chain refund of $65 million in damages.

However, due to continuous avoidance of responsibility from Multichain, Fantom intends to petition the court to dissolve the Multichain Foundation and appoint a liquidator to recover assets, similar to Chapter 7 bankruptcy in the United States.

This liquidator will act on behalf of affected organizations to locate and recover assets. The liquidator also has legal authority to act on behalf of Multichain to compensate the organization.

As previously reported, Multichain officially confirmed its cessation of operations in July 2023 following news of CEO Zhaojun’s arrest by Chinese police, along with suspicious $210 million transfers prior to the official announcement. This raised concerns about the project’s potential “rug pull” within the community.

Since then, the project has been “radio silent”. By September 2023, the cross-chain development team was poised to “revive” Multichain under the new name ValueRouter, essentially leveraging the cross-chain technology. However, the mystery of the missing $200 million-plus remains unresolved.

FTM/USD Chart During Fantom’s Setback Period

Despite the setbacks faced by Fantom, the price of FTM has been steadily increasing since October last year.

FTM/USDT at 7:30 AM on March 5, 2024, on Tradingview