Sonic Labs CEO Michael Kong said in a May 14 statement to X that the team behind the layer 1 Sonic blockchain felt it had no choice but to file a lawsuit to forcibly wind up Multichain because its former employees were being “completely uncooperative” and “hid from victims.”“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,” Kong said.
Wind up action followed legal win The High Court of Singapore granted a default judgment ruling in January 2024 as part of Sonic Labs’ legal action against Multichain for breach of contract and fraudulent misrepresentations after Fantom claimed the crosschain protocol had lost $122 million of its funds.
Related: Multichain’s ‘mysterious withdrawals’ have whiffs of a ‘rug pull’ — ChainalysisFollowing the ruling, Sonic Labs said in March 2024 it would leverage the legal win to petition the court to wind up the Multichain Foundation and appoint a liquidator, equivalent to a Chapter 7 bankruptcy in the US, to help recover and distribute missing or frozen assets.
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Author / Journalist: Cointelegraph by Stephen Katte
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