The High Court of Singapore recently approved a winding-up order against Multichain Foundation Ltd., a once-prominent cross-chain infrastructure protocol that suffered a security breach in 2023, resulting in over $210 million in user losses. The order, issued on May 9, 2025, was in response to a petition filed by Sonic Labs (formerly the Fantom Foundation), one of the platforms affected by the hack.
The court appointed Bob Yap Cheng Ghee, Toh Ai Ling, and Tan Yen Chiaw of KPMG Services Pte. Ltd. as joint and several liquidators of the Multichain Foundation. Their primary task is to oversee the company’s dissolution and asset recovery, including handling compensation claims brought by Sonic Labs and other affected parties.
The legal outcome follows a default judgment earlier this year in favor of Sonic Labs, who sought damages for losses incurred during the exploit. Multichain’s representatives did not appear in court, leading the judge to rule based on uncontested evidence.
Multichain, previously known as Anyswap, operated as a decentralized bridge protocol enabling users to transfer assets across more than 10 blockchains, such as Ethereum, BNB Chain, Polygon, and Fantom. In July 2023, the platform experienced unexplained withdrawals exceeding $210 million, later confirmed as a security breach with suspicions pointing to the project’s central control structure.
Evidence presented in court revealed that Multichain’s CEO, Zhaojun, held sole access to core administrative keys, enabling unauthorized movement of user assets. Despite initial claims of decentralization, this central control became a vulnerability point, impacting multiple protocols and ecosystems. Sonic Labs estimated that approximately one-third of the total losses were incurred by applications on the Fantom network.
Sonic Labs argued in its legal filings that Multichain breached its user obligations and failed to uphold adequate security for the assets entrusted to it. The court concurred, ordering the company to pay $2.18 million in compensation. With the winding-up order granted, Sonic Labs may now recover its awarded funds from Multichain’s remaining assets.
The liquidation of Multichain reflects a broader trend of legal and regulatory responses to internal failures within the crypto industry. This incident is one of many damaging events that have affected the crypto space, with security breaches escalating in recent times.
According to blockchain security firm Immunefi, the first quarter of 2025 witnessed the worst period in crypto history for security breaches, totaling $1.64 billion across 39 incidents. Centralized exchanges (CeFi) bore the brunt of these attacks, with two major breaches accounting for the majority of losses.
Despite facing 38 incidents, DeFi protocols incurred significantly lower losses of $106.8 million, a 69% decrease from Q1 2024. The North Korean-linked Lazarus Group is suspected to be behind the major attacks, responsible for the majority of losses.
As the cryptocurrency ecosystem grapples with increasing security challenges, the Multichain liquidation serves as a cautionary tale for the industry. Stakeholders are urged to prioritize security measures to safeguard user assets and maintain trust in the evolving digital landscape.