Sonic Labs wins legal ruling to force Multichain Foundation liquidation for fund recovery 

Sonic Labs, formerly known as the Fantom Foundation, has secured a legal victory in Singapore to force the liquidation of the Multichain Foundation, following the massive 2023 hack that saw over $210 million siphoned from cross-chain bridges operated by Multichain.

The ruling, granted by the Singapore High Court on May 9, authorizes accounting firm KPMG to act as the official liquidator and oversee the recovery of lost assets.

The court’s decision comes after months of legal proceedings initiated by Sonic Labs, which accused Multichain of non-cooperation in tracing and recovering stolen funds.

According to Sonic Labs CEO Michael Kong, “Unfortunately since Multichain and its former employees have been completely uncooperative, we were compelled to file a lawsuit against Multichain and to forcibly wind-up the company. If Multichain had not hid from victims, this entire process would’ve been unnecessary and we would’ve saved more than a year.”

I’m pleased to announce that on 9 May, 2025, Fantom Foundation’s (now @SonicLabs) winding up application against Multichain Foundation Ltd by the Singapore High Court was granted in full.

Individuals from KPMG Singapore were also appointed as liquidators on the same day.…

— Kong.sonic (@michaelfkong) May 14, 2025

The 2023 Multichain exploit led to a significant loss for Sonic Labs

Multichain, a cross-chain bridge protocol formerly known as Anyswap, suffered a major security breach in July 2023, which led to an estimated $210 million being drained from multiple blockchain networks, including Fantom, Ethereum, BNB Chain, and others.

The incident dealt a heavy blow to users and decentralized apps that relied on the protocol to facilitate cross-chain asset transfers. Chainalysis suggested that it had some indications of a rug pull.

Sonic Labs, which was still known as the Fantom Foundation then, lost about $122 million due to the incident.

The loss of funds and the series of events that followed led to Multichain ceasing operations altogether. The whereabouts of CEO Zhaojun were also unknown for some time until it came to light that he was arrested by Chinese authorities due to the fallout of the breach.

Legal action and the path to liquidation

Sonic Labs filed for breach of contract, fraud, and loss of $122 million of its funds against Multichain in the High Court of Singapore, which granted a default judgment ruling in January 2024.

After the ruling, it was still hard to reach the Multichain team, prompting Sonic Labs in March 2024 to petition the court to wind up the Multichain Foundation and appoint a liquidator to help it recover and redistribute its assets.

The Singapore High Court ruling now enables the appointment of KPMG to oversee the liquidation of Multichain Foundation’s assets.

“Going forward, the liquidators can now start working with other parties to initiate the process of trying to acquire funds that should eventually be returned to users if those legal proceedings are successful,” added Kong.

The case also points to a growing trend of leveraging traditional legal systems to seek justice and restitution in the otherwise borderless and largely pseudonymous world of crypto. Some see this as a move in the right direction, as the sector at large is pushing for more legitimacy and protection for users.