Sonic Labs CEO Michael Kong Announces the Singapore High Court Has Approved the Liquidation of Multichain Foundation

Sonic Labs CEO Michael Kong announced that the Singapore High Court has approved the liquidation of Multichain Foundation, appointing KPMG's Singapore branch as liquidators.

Sonic Labs CEO Michael Kong announced that the Singapore High Court has approved the liquidation of Multichain Foundation, appointing personnel from the accounting firm KPMG’s Singapore branch as liquidators.

Kong made the announcement in a recent post on X, where he also disclosed that the court, which issued its ruling on May 9, has granted Sonic Labs’ application to liquidate Multichain.

The case arose from Multichain’s failure to deliver 4.175 million FTM tokens or their equivalent value to Sonic Labs, which was awarded $2.19 million in damages.

As previously reported by Bitcoin.com News, Sonic Labs, formerly known as Fantom Foundation, was awarded the damages in a suit against Multichain Foundation.

The case stemmed from a security breach on July 7, 2023, which resulted in the loss of over $210 million in assets, including stablecoins (USDT, USDC, DAI) and wrapped tokens, from the Multichain Bridge.

However, despite the court’s ruling, Multichain Foundation has yet to comply, forcing Sonic Labs to take further legal action.

“Unfortunately, since Multichain and its former employees have been completely uncooperative, we were compelled to file a lawsuit against Multichain and forcibly wind up the company. If Multichain had not been trying to hide from victims, this entire process would not have been necessary, and we would have started distributing funds to creditors a year ago. Now, the appointed liquidators will begin the work of securing funds that can eventually be returned to users, which will depend on the outcome of pending legal proceedings,” said Kong.

The court's decision to liquidate Multichain Foundation comes after a long-running saga that began with the cryptocurrency startup's failure to pay back creditors following a major security breach last year.

The breach, which wiped out millions of dollars in crypto assets, led to a court case in Singapore, where Sonic Labs was awarded damages for the unpaid FTM tokens and lost cryptocurrency.

In September 2023, the court awarded Sonic Labs $58,620.55 for stablecoins and $2,129,250 for 4.175 million FTM tokens, based on market value calculations at the time of the breach.

However, despite the ruling, Multichain has still refused to cooperate with creditors, forcing Sonic Labs to apply for the foundation’s liquidation.

The liquidation will be carried out by KPMG, which will work to recover funds from Multichain’s assets and distribute them to creditors.

The move is a significant setback for Multichain, which was once a leading decentralized finance (DeFi) startup.

The startup's flagship product, Multichain, is a blockchain interoperability protocol that allows different blockchains to communicate with each other seamlessly.

At the time of the breach, Multichain was processing billions of dollars in daily transactions and was a key piece of infrastructure for the rapidly growing DeFi ecosystem.

However, the startup encountered difficulties earlier this year after it failed to pay back creditors following the massive theft of coins from its hot wallet.

The theft occurred on July 2, 2023, and led to the loss of a significant sum in stablecoins (USDT, USDC, DAI) and wrapped tokens, which were being held on the Multichain Bridge for transfer to another chain.

After the theft, Multichain went silent for several days before announcing that it was the subject of a "malicious cybersecurity attack."

The startup's CEO, Jianping Shi, also known as "Jimmy," fled China and appealed to creditors for patience as he worked to resolve the issues.

However, despite Shi's efforts, creditors grew impatient and decided to sue Multichain in a bid to recover their losses.

In July 2024, Sonic Labs won its case against Multichain, with the Singapore High Court ordering the startup to pay up.

The case arose from Multichain’s failure to deliver 4.175 million FTM tokens or their equivalent value to Sonic Labs, which was awarded 2,129,250 in damages.

The case stemmed from a security breach on July 7, 2023, which led to the loss of more than $210 million in assets, including stablecoins (USDT, USDC, DAI) and wrapped tokens, from the Multichain Bridge.

On September 18, 2023, the court assessed the diminished value of the lost assets and awarded Sonic Labs $58,620.55 for stablecoins and $2,129,250 for 4.175 million FTM tokens, based on market value calculations.

However, despite the court ruling, Multichain Foundation has yet to comply,