The High Court of Singapore has approved a request by Sonic Labs to liquidate the Multichain Foundation after a massive $210 million crypto exploit in July 2023. The ruling, issued on May 9, 2025, empowers KPMG Singapore to act as joint liquidators tasked with recovering stolen funds. Sonic Labs, a major victim of the hack that accounted for about one-third of the losses, initiated the lawsuit after Multichain breached contractual obligations and made fraudulent misrepresentations.
Following the exploit, Multichain shut down operations, and its CEO, Zhaojun He, was reported detained by Chinese authorities prior to the hack. The leadership's silence and disappearance hindered private resolution attempts, prompting Sonic Labs to pursue legal action. The liquidation will involve asset tracing and redistribution under Singapore jurisdiction, with hopes that recovered funds might be returned to affected users.
This case is significant as it could set a legal precedent for holding decentralized finance (DeFi) projects accountable for security failures and mismanagement. It highlights vulnerabilities arising from centralized control within purportedly decentralized systems and underscores the importance of transparency and regulatory compliance in crypto platforms.
While full recovery of the stolen assets is uncertain due to the complexities of tracing crypto funds across blockchains and potential laundering, this legal step exemplifies the growing regulatory scrutiny and the necessity for formal dispute resolution in crypto ecosystems. The liquidation symbolizes a move towards greater accountability and could influence the development of future protocols with enhanced governance and security measures.