The Multichain Foundation Winding-Up Order
The High Court of Singapore has recently sanctioned a winding-up order against Multichain Foundation Ltd., a notable cross-chain infrastructure protocol. This decision follows a significant security breach in 2023 that led to approximately $210 million in user losses. The order was granted on May 9, 2025, in relation to a petition filed by Sonic Labs, formerly known as the Fantom Foundation, which was one of the platforms adversely affected by the hacking incident.
Court’s Decision and Liquidators Appointment
The court appointed a team of professionals from KPMG Services Pte. Ltd., specifically Bob Yap Cheng Ghee, Toh Ai Ling, and Tan Yen Chiaw, to act as the joint liquidators for Multichain Foundation. Their primary role involves overseeing the dissolution of the company and ensuring the recovery of assets, as well as addressing compensation claims from Sonic Labs and other aggrieved parties.
This legal development is the culmination of prior events, including a default judgment rendered earlier in the year in favor of Sonic Labs. They had sought damages for the financial losses incurred during the exploit, and the court’s decision did not require a defense from Multichain, as their representatives failed to appear.
Understanding the Multichain Exploit
Multichain, which started as Anyswap, was designed to facilitate a decentralized bridge protocol. This platform allowed users to transfer digital assets across more than ten blockchains, including major networks such as Ethereum, BNB Chain, Polygon, and Fantom. However, in July 2023, a disaster struck when the platform suffered unexplained withdrawals that amounted to over $210 million. Further investigations revealed this to be a security breach, raising fears concerning the project’s governance and central control.
Court evidence highlighted the role of Multichain’s CEO, Zhaojun, who had sole access to crucial administrative keys. This monopoly allowed unauthorized transactions of user assets, undermining the platform’s purported decentralized nature. The centralization of control turned into a vulnerability as multiple protocols and ecosystems were affected, with Sonic Labs estimating that about 33% of total losses were shouldered by applications on the Fantom network.
In its filings, Sonic Labs contended that Multichain violated user obligations by failing to provide adequate security for user assets. The court deemed these claims valid and ordered Multichain to pay $2.18 million in damages. With the recent winding-up order in effect, Sonic Labs may now retrieve its awarded funds from the dwindling assets of Multichain.
The Rise in Crypto Exploits
The liquidation of Multichain highlights a troubling trend within the crypto industry, characterized by a wave of legal responses to internal failures. This recent incident is just one in a series of damaging events that have shaken the crypto sphere. In the first quarter of 2025, reports from blockchain security firms such as Immunefi revealed a record high in security breaches, marking it the worst quarter for hacks in the history of the crypto ecosystem.
In total, a shocking $1.64 billion was lost over 39 incidents in this period. Centralized exchanges (CeFi) bore the brunt of these attacks, with two major breaches resulting in considerable losses: Phemex lost $69.1 million in January, and Bybit suffered an astounding $1.46 billion exploit in February. Together, these two incidents drove the losses to a staggering 4.7 times higher than the amount recorded in Q1 2024, when hackers had stolen around $348 million.
Interestingly, investigations suggest that the infamous North Korean-linked Lazarus Group was behind both of the significant attacks, collectively responsible for $1.52 billion—a striking 94% of the total losses within this timeframe. Commenting on the situation, Mitchell Amador, founder of Immunefi, remarked that this marks a pivotal moment in crypto security.
While centralized exchanges faced only two attacks, these resulted in extensive financial damage. Conversely, decentralized finance (DeFi) protocols experienced 38 incidents, but incurred a relatively low total loss of $106.8 million—a 69% decline from the previous year’s numbers.
In conclusion, the Multichain Foundation’s winding-up order is yet another indicator of the challenges and vulnerabilities facing the crypto industry, particularly concerning security and regulatory frameworks. As the industry navigates these tumultuous waters, it remains crucial for users and platforms alike to advocate for enhanced security measures and more transparent operational structures.