Singapore likes to bill itself as friendly to blockchain innovation, but this week it made one thing very clear: being crypto-friendly does not mean being consequence-free.
In a decision that will echo through DeFi circles for a long time, Singapore’s High Court approved the liquidation of the Multichain Foundation. It is one of the most significant legal actions ever taken against a major decentralized protocol, and it sends a message that even in crypto, gravity still applies.
The ruling, announced on Friday, caps a long and messy legal battle led by Sonic Labs CEO Michael Kong. In a post on X, Kong confirmed that KPMG’s Singapore office has now been appointed to wind down the troubled cross-chain protocol. For anyone who has spent years watching crypto projects quietly disappear after disasters, this felt different. Singapore did not look away.
The story itself is painfully familiar. In July 2023, Multichain suffered a massive breach that drained more than $210 million in user funds, including stablecoins and wrapped assets spread across multiple chains. Chaos followed, then silence. Sonic Labs, formerly Fantom Foundation, became one of the most vocal and persistent claimants, arguing that 4.175 million FTM tokens it was owed were never delivered.
After months of legal sparring, the Singapore courts ruled in Sonic Labs’ favor in September 2023, awarding $2.19 million based on post-hack market prices. But a judgment is only useful if someone responds to it. According to Kong, Multichain did not. With no cooperation and no clear path to recovery, Sonic Labs pushed for something rarely seen in crypto: formal liquidation.
That move worked.
With the court’s approval, KPMG now steps in to sort through whatever remains of Multichain’s assets and obligations. It is not glamorous work, but it is real-world accountability, and that matters. Singapore, often described as a “crypto oasis,” is showing that its regulatory credibility comes from enforcement, not slogans.
The industry reaction has been predictably mixed. Some see the ruling as overdue, especially for cross-chain bridges, which have become some of the most exploited pieces of infrastructure in DeFi. Others worry that this kind of precedent could chill experimentation in a sector built on fast iteration and high risk.
For Multichain users, KPMG’s involvement offers cautious optimism. Recoveries, if any, will likely be partial, and timelines remain unclear. Still, a structured process beats endless uncertainty.
Bigger questions linger. Can something designed to be decentralized truly be liquidated? How do courts deal with protocols run by anonymous or semi-anonymous teams? Singapore has not solved every philosophical problem here, but it has shown a willingness to act pragmatically rather than shrug.
When the headlines fade, the liquidation of Multichain Foundation will stand as more than a protocol’s collapse. It marks a moment when a major jurisdiction decided that crypto does not get a free pass just because it is complicated.
The takeaway for builders and investors is simple and slightly uncomfortable: innovate boldly, yes, but do not confuse decentralization with immunity. Even in crypto, someone eventually shows up with a clipboard.
