The High Court of Singapore<\/strong> has recently sanctioned a winding-up order<\/strong> against Multichain Foundation Ltd.<\/strong>, a notable cross-chain infrastructure protocol. This decision follows a significant security breach<\/strong> in 2023 that led to approximately $210 million<\/strong> in user losses. The order was granted on May 9, 2025<\/strong>, in relation to a petition filed by Sonic Labs<\/strong>, formerly known as the Fantom Foundation<\/strong>, which was one of the platforms adversely affected by the hacking incident.<\/p>\n The court appointed a team of professionals from KPMG Services Pte. Ltd.<\/strong>, specifically Bob Yap Cheng Ghee, Toh Ai Ling,<\/strong> and Tan Yen Chiaw<\/strong>, to act as the joint liquidators<\/strong> 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<\/strong> from Sonic Labs and other aggrieved parties.<\/p>\n This legal development is the culmination of prior events, including a default judgment<\/strong> 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\u2019s decision did not require a defense from Multichain, as their representatives failed to appear.<\/p>\n Multichain, which started as Anyswap<\/strong>, was designed to facilitate a decentralized bridge protocol. This platform allowed users to transfer digital assets across more than ten blockchains<\/strong>, including major networks such as Ethereum<\/strong>, BNB Chain<\/strong>, Polygon<\/strong>, and Fantom<\/strong>. However, in July 2023<\/strong>, a disaster struck when the platform suffered unexplained withdrawals<\/strong> that amounted to over $210 million<\/strong>. Further investigations revealed this to be a security breach<\/strong>, raising fears concerning the project\u2019s governance and central control.<\/p>\n Court evidence highlighted the role of Multichain\u2019s CEO, Zhaojun<\/strong>, who had sole access to crucial administrative keys<\/strong>. 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%<\/strong> of total losses were shouldered by applications on the Fantom<\/strong> network.<\/p>\n 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<\/strong> in damages. With the recent winding-up order in effect, Sonic Labs may now retrieve its awarded funds from the dwindling assets of Multichain.<\/p>\n The liquidation of Multichain highlights a troubling trend within the crypto industry<\/strong>, 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<\/strong>, reports from blockchain security firms such as Immunefi<\/strong> revealed a record high in security breaches, marking it the worst quarter for hacks<\/strong> in the history of the crypto ecosystem.<\/p>\n In total, a shocking $1.64 billion<\/strong> was lost over 39 incidents<\/strong> in this period. Centralized exchanges (CeFi) bore the brunt of these attacks, with two major breaches resulting in considerable losses: Phemex<\/strong> lost $69.1 million<\/strong> in January, and Bybit<\/strong> suffered an astounding $1.46 billion<\/strong> exploit in February. Together, these two incidents drove the losses to a staggering 4.7 times<\/strong> higher than the amount recorded in Q1 2024<\/strong>, when hackers had stolen around $348 million<\/strong>.<\/p>\n Interestingly, investigations suggest that the infamous North Korean-linked Lazarus Group<\/strong> was behind both of the significant attacks, collectively responsible for $1.52 billion<\/strong>\u2014a striking 94%<\/strong> of the total losses within this timeframe. Commenting on the situation, Mitchell Amador<\/strong>, founder of Immunefi, remarked that this marks a pivotal moment in crypto security.<\/p>\n While centralized exchanges faced only two attacks<\/strong>, these resulted in extensive financial damage. Conversely, decentralized finance (DeFi)<\/strong> protocols experienced 38 incidents<\/strong>, but incurred a relatively low total loss of $106.8 million<\/strong>\u2014a 69%<\/strong> decline from the previous year\u2019s numbers.<\/p>\n 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.<\/p>\nCourt’s Decision and Liquidators Appointment<\/h2>\n
Understanding the Multichain Exploit<\/h2>\n
The Rise in Crypto Exploits<\/h2>\n