Singapore Court Orders Multichain to Pay Fantom Foundation $2.19 Million

Fantom Foundation Ltd. (the claimant) filed a case against Multichain Foundation Ltd. and Multichain Pte Ltd. (the defendants) in the High Court of Singapore after a default judgment. The claimant sought damages for the loss of various crypto assets due to the defendants' failure to deliver 4.175 million fantom (FTM) tokens or their equivalent value. The default judgment, obtained on January 30th, mandated the assessment of damages and the delivery of the FTM tokens or their value.

Judicial Commissioner Mohamed Faizal wrote:

For the reasons set out in this judgment, having heard the claimant, I grant the claimant the sum of US$58,620.55 in relation to the damages claim, and US$2,129,250 in relation to the FTM claim.

The claimant's damages claim arose from the loss of stablecoins (USDT, USDC, DAI) and wrapped tokens held on the Multichain Bridge, a platform operated by the first defendant for trading wrapped tokens. On July 7, 2023, a security breach resulted in the loss of over $127 million in assets, including the claimant's. The court was asked to assess the value of these lost assets as of September 18, 2023, when their residual value was found to be significantly reduced due to the breach.

The court awarded the claimant $58,620.55 for the lost stablecoins and $2,129,250 for the 4.175 million FTM tokens based on market value calculations. The valuation method for the FTM tokens considered their price on April 14, 2023, and the average trading price on Binance, the largest cryptocurrency exchange. The court acknowledged the inherent challenges in valuing cryptocurrencies due to their volatility and lack of a single objective price.

Fantom Foundation issued a statement following the court order, emphasizing that "the Court awarded Fantom US$2,187,870.55 for losses suffered." Noting that "although this judgment only relates to Fantom's own losses," the Foundation stressed:

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."