The High Court of Singapore has ordered the Multichain Foundation, a cross-chain router protocol, to compensate the Fantom Foundation, a layer-1 platform, with $2.18 million in damages following a significant hack.
The Hack Incident
In July 2023, the Multichain Foundation experienced abnormal outflows, later confirmed as a hack, resulting in the loss of over $210 million in assets across multiple chains. This breach affected numerous protocols, including Fantom, Ethereum, BNB, Cronos, Polygon, Arbitrum, zkSync, Optimism, and Moonbeam.
Legal Action and Court Decision
The Fantom Foundation reported its financial losses to the High Court of Singapore and sought compensation. During a court hearing on June 3, Fantom’s representatives presented evidence while Multichain’s representatives were absent. Fantom argued that the hack occurred due to the Multichain CEO’s ultimate control over the cryptocurrency assets stored in the Multichain Bridge. The court found that Multichain admitted this claim on social media and breached the user agreement.
Compensation Awarded
On July 8, the court awarded Fantom $2.18 million for losses suffered during the hack. Although Fantom initially claimed that its ecosystem losses were about one-third of the total $210 million losses, the court’s ruling provides partial compensation.
Rising Crypto Losses
According to blockchain security platform Immunefi, crypto losses from hacks and scams more than doubled in the second quarter of 2024 compared to the same period in 2023. Over $572 million was lost to hacks in Q2 2024, up from $220 million in Q2 2023. Centralized exchange hacks accounted for most of these losses.
Before Q2 2024, losses from hacks and scams had been declining. Immunefi reported a 23% reduction in Q1, with the decline continuing through April and most of May. However, losses peaked at the end of May and June, reversing the earlier downward trend.
