Multichain Foundation Faces Court-Ordered Liquidation After $210M Hack
Singapore court mandates Multichain Foundation’s liquidation post $210M exploit; KPMG appointed to oversee asset recovery.
In a landmark decision, the Singapore High Court has approved Sonic Labs’ petition to liquidate the Multichain Foundation, following a devastating $210 million exploit in 2023. This move aims to recover lost assets and restore trust within the decentralized finance (DeFi) community.
The Exploit and Its Aftermath
Multichain, once a prominent cross-chain protocol, suffered a significant breach in July 2023, leading to abnormal outflows across multiple blockchains, including Fantom, Ethereum, BNB, Cronos, and Polygon. Investigations revealed that the platform’s CEO, known as Zhaojun, had been detained by Chinese authorities prior to the incident, leaving the protocol’s operations in disarray.
Sonic Labs, formerly the Fantom Foundation, was among the hardest hit, losing approximately one-third of the total stolen funds. The organization’s attempts to engage with Multichain’s team were met with silence, prompting legal action.
Legal Proceedings and Liquidation
On May, 2025, Justice Kwek Mean Luck granted Sonic Labs’ request to wind up Multichain, appointing KPMG Singapore as the liquidator. This decision empowers KPMG to oversee the bankruptcy proceedings, identify remaining assets, and facilitate their distribution to affected parties.
Michael Kong, CEO of Sonic Labs, emphasized the necessity of this legal route, stating that the uncooperative nature of Multichain’s former employees left them with no alternative.
Implications for the DeFi Ecosystem
This case underscores the vulnerabilities inherent in DeFi platforms, particularly those with centralized control points. The court’s intervention sets a precedent for how legal systems can address failures in decentralized projects, highlighting the importance of transparency, accountability, and robust governance structures.
For investors and users, this development serves as a cautionary tale about the risks associated with DeFi protocols and the critical need for due diligence.
What are your thoughts on the court’s decision and its impact on the DeFi landscape? Share your insights below and stay connected with trafy.io for more updates on the evolving world of decentralized finance.
