Singapore Court Rules in Multichain Case

Fantom Foundation Ltd. (the claimant) brought a case against Multichain Foundation Ltd. and Multichain Pte Ltd. (the defendants) in the High Court of Singapore following a default judgment.

Singapore Court Rules in Multichain Case, Awarding Fantom Foundation $2.19 Million

Fantom Foundation has been awarded damages totaling $2.19 million by the High Court of Singapore in a case against Multichain Foundation and Multichain Pte over a failed delivery of 4.175 million FTM tokens.

The court’s assessment of damages followed a default judgment obtained by Fantom Foundation on Jan. 30, which mandated the delivery of the FTM tokens or their equivalent value. The foundation had filed a claim for the loss of various crypto assets due to the defendants’ failure to deliver the tokens.

According to the court order, the foundation’s damages claim stemmed from the loss of stablecoins (USDT, USDC, DAI) and wrapped tokens held on the Multichain Bridge, a platform operated by Multichain Foundation for trading wrapped tokens. On July 7, 2023, a security breach on the bridge led to the loss of over $127 million in assets, including those belonging to the foundation.

The court was tasked with assessing the value of these lost assets as of Sept. 18, 2023, when their residual value was found to be significantly reduced due to the breach.

In its judgment, the court awarded the foundation $58,620.55 for the lost stablecoins and $2,129,250 for the 4.175 million FTM tokens. The court arrived at these figures based on market value calculations, considering the value of the stablecoins on July 7, 2023, and the FTM token’s price on April 14, 2023, multiplied by the average trading price on Binance, the largest cryptocurrency exchange, during the period from July 7 to Sept. 18, 2023.

The court noted the inherent challenges in valuing cryptocurrencies due to their volatility and the lack of a single objective price, but it ultimately adopted this method as being "fair and reasonable in the circumstances."

Following the court order, Fantom Foundation highlighted in a statement that "the Court awarded Fantom US$2,187,870.55 for losses suffered."

"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," the foundation added.

"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."

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