Sonic Labs Secures Court-Ordered Multichain Liquidation After $210M Hack, Users Await Repayment

Sonic Labs, formerly known as Fantom Foundation, has achieved a significant legal victory against Multichain Foundation Ltd. following a devastating $210 million hack in July 2023. On May 9, 2025, the High Court of Singapore granted a winding-up order, appointing liquidators from KPMG Services Pte. Ltd. to handle Multichain’s dissolution and asset recovery. This action stems from Sonic Labs securing a default judgment for $122 million in January 2024, highlighting the vulnerabilities of centralized control in decentralized systems.

• Multichain hacked for $210M in 2023
• Singapore High Court orders liquidation
• KPMG liquidators appointed
• Centralized control vulnerability exposed
• 2025 Q1 sees record crypto losses

The Multichain hack was a stark reminder of the security challenges facing the crypto world. The breach was facilitated by Multichain’s CEO, Zhaojun, who had sole access to the protocol’s core administrative keys. Think of it as leaving the front door of your digital vault wide open in a neighborhood notorious for break-ins. This single point of failure allowed hackers to siphon off $210 million in assets, impacting multiple blockchains and ecosystems.

Following the hack, Sonic Labs took decisive action, filing a petition that led to the court’s decision. The High Court’s order appointed Bob Yap Cheng Ghee, Toh Ai Ling, and Tan Yen Chiaw from KPMG Services Pte. Ltd. as liquidators. These professionals are now tasked with managing Multichain’s assets during its dissolution, a process aimed at recovering funds for victims like Sonic Labs.

The Multichain incident is part of a broader trend of increasing security breaches in the crypto industry. The first quarter of 2025 was the worst on record, with crypto losses totaling $1.64 billion across 39 incidents. Centralized exchanges bore the brunt, with Phemex and Bybit reporting losses of $69.1 million and $1.46 billion, respectively. The notorious Lazarus Group, linked to North Korea, is suspected to be behind these massive heists, turning the crypto world into their personal piggy bank.

While decentralized finance (DeFi) protocols faced more frequent attacks, with 38 incidents reported, the centralized finance (CeFi) sector suffered significantly higher financial losses, with just two attacks accounting for the majority of the damage. It’s a grim reminder that while DeFi might be the Wild West of finance, CeFi is where the big bucks are getting stolen.

“This marks a historic moment in crypto security,” said Mitchell Amador, founder of Immunefi.

The ripple effects of the Multichain hack extend beyond the immediate financial loss. It underscores the urgent need for robust security measures across all facets of the crypto ecosystem. Additionally, it sets a precedent for legal recourse, offering hope to victims of crypto breaches that they might recover their losses through the courts.

Yet, the path to recovery remains challenging. The decentralized ethos championed by the crypto community is often at odds with the centralized vulnerabilities that enable such breaches. It’s a paradox that the industry continues to grapple with, and one that won’t be solved overnight. Can decentralized systems ever be truly secure if centralized control remains a vulnerability? This question looms large over the industry’s future.

As the liquidators at KPMG work to navigate this complex financial landscape, the crypto community is left to ponder the future. Will this case be the catalyst for more stringent security protocols? Can the industry move towards a more decentralized model, or will centralized control continue to be its Achilles’ heel? Only time will tell, but for now, all eyes are on Sonic Labs and the efforts to turn this legal victory into tangible recovery for those affected.

Key Takeaways and Questions

• What was the outcome of the Multichain security breach?

  The High Court of Singapore ordered the liquidation of Multichain Foundation Ltd. after a $210 million hack in 2023, with liquidators appointed to oversee dissolution and asset recovery.

• Who initiated the legal action against Multichain?

  Sonic Labs, formerly the Fantom Foundation, initiated the legal action, having previously won a default judgment for losses incurred during the hack.

• What role did centralized control play in the Multichain breach?

  Centralized control was a critical vulnerability, with Multichain’s CEO, Zhaojun, having sole access to core administrative keys, which enabled unauthorized asset movement.

• How does the Multichain incident reflect broader trends in the crypto industry?

  The incident is part of a growing trend of legal and regulatory actions in response to security breaches, with the first quarter of 2025 being the worst for crypto security, largely due to attacks on centralized exchanges.

• What was the financial impact of crypto security breaches in Q1 2025?

  Crypto security breaches in Q1 2025 resulted in losses totaling $1.64 billion across 39 incidents, with centralized exchanges suffering the most significant damage.