Multichain to Pay Fantom $2.1M in Losses

The Multichain Foundation, a cross-chain router protocol, has been ordered by the High Court of Singapore to compensate the Fantom Foundation, a layer-1 platform, for losses sustained during a $210 million breach.

The Chinese cross-chain protocol Multichain Foundation experienced abnormally large outflows in July 2023, subsequently identified as a breach.

The attack resulted in the loss of over $210 million in assets across multiple chains, including Fantom, Ethereum, BNB, Cronos, Polygon, Arbitrum, zkSync, Optimism, and Moonbeam, as a consequence of the numerous protocols associated with the chain that were compromised.

Holding Multichain Foundation accountable in court

The Fantom Foundation submitted a report regarding its financial losses to the Singapore High Court and pursued compensation.

Fantom’s representatives presented evidence to the Singapore court during a recent court hearing on June 3, while Multichain’s representatives were absent from the proceedings. Representatives from Fantom disclosed:

“The Claimant’s position is that the breach was possible because the CEO of the First Defendant had ultimate privileges and control over the cryptocurrency assets stored in the Multichain Bridge.”

The court determined that Multichain had acknowledged this claim regarding X and violated the user agreement.

The Fantom Foundation Recovers Losses

The court granted Fantom $2.187 million in compensation for the losses incurred during the hack on July 8. Nevertheless, Fantom had previously asserted that the ecosystem losses amounted to approximately one-third of the total losses valued at $210 million.

According to research conducted by Immunefi, a blockchain security platform, the number of crypto losses resulting from breaches and scams more than doubled in the second quarter of 2024 compared to the same period in 2023.

Compared to $220 million in Q2 2023, breaches resulted in a loss of over $572 million in Q2. Most of the losses during the quarter resulted from centralized exchange breaches.

In the first quarter, Immunefi reported a 23% decrease in losses from breaches and scams, which had decreased before the second quarter. This decline persisted throughout April and most of May, reaching its zenith in late May and early June.