Singapore High Court Orders Multichain to Pay Fantom $2.19M in Damages

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The High Court of Singapore has mandated Multichain Foundation Ltd. and Multichain Pte Ltd. to compensate Fantom Foundation Ltd. with damages amounting to $2.19 million. This judgment emerged following Multichain’s failure to deliver 4.175 million FTM tokens or their equivalent value, leading to a default ruling.

Fantom Foundation pursued legal action against Multichain for the loss of several crypto assets, resulting from the defendants’ inability to provide the agreed-upon FTM tokens or their equivalent value. On January 30, a default judgment was issued, which required an assessment of the damages and the delivery of the FTM tokens or their value.

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Judicial Commissioner Mohamed Faizal stated in the ruling, “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 Fantom Foundation’s damages claim stemmed from the loss of stablecoins such as USDT, USDC, and DAI, as well as wrapped tokens held on the Multichain Bridge. This platform, operated by the first defendant, facilitates trading in wrapped tokens. A security breach on July 7, 2023, resulted in the loss of over $127 million in assets, including those of the Fantom Foundation. Consequently, the court was requested to evaluate the value of these lost assets as of September 18, 2023, when their residual value had significantly diminished due to the breach.

The court determined the claimant should receive $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. Acknowledging the inherent challenges in valuing cryptocurrencies due to their volatility and lack of a single objective price, the judgment highlighted these difficulties.

In a statement following the court order, Fantom Foundation noted, “The Court awarded Fantom US$2,187,870.55 for losses suffered.” Emphasizing that “although this judgment only relates to Fantom’s own losses,” the Foundation underscored its broader goals: “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 further 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.”