Fantom Foundation Ltd v Multichain Foundation Ltd: Assessment of Damages for Cryptocurrency Loss
In Fantom Foundation Ltd v Multichain Foundation Ltd, the General Division of the High Court of Singapore addressed the assessment of damages arising from a default judgment obtained by Fantom Foundation Ltd against Multichain Foundation Ltd and Multichain Pte Ltd. The case involved the loss of cryptocurrency assets due to a security breach. Mohamed Faizal JC granted the Claimant US$58,620.55 for the damages claim and US$2,129,250 for the FTM claim, based on the value of the assets at the time of the breach.
1. Case Overview
1.1 Court
General Division of the High Court of the Republic of Singapore1.2 Outcome
Judgment for Claimant
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court assesses damages in favor of Fantom Foundation Ltd against Multichain Foundation Ltd for losses of cryptocurrency assets due to a security breach.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Fantom Foundation Ltd | Claimant | Corporation | Judgment for Claimant | Won | |
| Multichain Foundation Ltd | Defendant | Corporation | Damages Awarded | Lost | |
| Multichain Pte Ltd | Defendant | Corporation | Damages Awarded | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Mohamed Faizal | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Nicolas Tang Tze Hao | Farallon Law Corporation |
| Ashviniy Narenthiren | Farallon Law Corporation |
4. Facts
- Claimant and First Defendant entered into agreements for integration of Claimant’s blockchain to First Defendant’s platform.
- Claimant deposited cryptocurrency assets into the Multichain Bridge.
- A security breach occurred, resulting in the loss of over US$127 million worth of assets.
- The First Defendant failed to ensure the Multichain Bridge was decentralised and safe.
- The Claimant transferred 4.175m FTM onto the Multichain Bridge pursuant to a liquidity facility.
- The 4.175m FTM were not returned to the Claimant.
5. Formal Citations
- Fantom Foundation Ltd v Multichain Foundation Ltd and another, Originating Claim No 621 of 2023 (Assessment of Damages No 2 of 2024), [2024] SGHC 173
6. Timeline
| Date | Event |
|---|---|
| Integration Agreement announced | |
| Claimant transferred 4.175m FTM onto the Multichain Bridge | |
| Claimant put deposits of source assets into the Multichain Bridge | |
| Security breach occurred | |
| HC/OC 621/2023 filed | |
| Claimant obtained default judgment | |
| Hearing held | |
| Judgment reserved |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that the First Defendant had breached the User Agreement.
- Category: Substantive
- Sub-Issues:
- Failure to ensure decentralised and safe nature of Multichain Bridge
- Fraudulent misrepresentation
- Assessment of Damages
- Outcome: The court assessed damages for the Claimant based on the value of the cryptocurrency assets at the time of the breach.
- Category: Procedural
- Valuation of Cryptocurrency
- Outcome: The court accepted the Claimant's expert's valuation methodology, using data from CoinMarketCap and SpookySwap.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
- Delivery of movable property
9. Cause of Actions
- Breach of Contract
- Fraudulent Misrepresentation
10. Practice Areas
- Commercial Litigation
- Cryptocurrency Litigation
11. Industries
- Cryptocurrency
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| In the matter of Hodlnaut Pte Ltd | High Court | Yes | [2023] SGHC 323 | Singapore | Cited for the principle that the court's acceptance of any valuation ascribed to cryptocurrency depends on the evidence presented. |
| iVenture Card Ltd v Big Bus Singapore City Sightseeing Pte Ltd and other | High Court | Yes | [2022] 1 SLR 302 | Singapore | Cited for the general position on valuing compensatory damages for breach of contract in Singapore. |
| Diamond Fortress Technologies Inc v EverID Inc | Delaware Superior Court | Yes | 274 A.3d 287 | United States | Cited as an example of another jurisdiction considering CoinMarket to be a reliable cryptocurrency valuation tool. |
| ByBit FinTech Limited v Ho Kai Xin & Others | High Court | Yes | [2023] 5 SLR 1748 | Singapore | Cited for the principle that the value of cryptocurrency lies in the faith that the market collectively places in it. |
| MFM Restaurants Pte Ltd and another v Fish & Co Restaurants Pte Ltd and another appeal | Court of Appeal | Yes | [2011] 1 SLR 150 | Singapore | Cited for the principle that the court may measure the quantum of compensatory damages by reference to the defendant’s gains or profits rather than the claimant’s own loss. |
| Toh Tiong Huat v P M Gunasaykaran (personal representative of the estate of Mayandi s/o Sinnathevar, deceased) and another | High Court | Yes | [1995] 3 SLR(R) 627 | Singapore | Cited for the principle that the court places reliance on market value when assessing the value of assets. |
| Hooper v Oats | Court of Chancery | Yes | [2014] Ch 287 | United Kingdom | Cited for the principle that the breach date rule does not apply in cases where there is no immediately available market for sale of the relevant asset or for the purchase of an equivalent asset. |
| Gallagher v Jones | United States Supreme Court | Yes | 9 S.Ct. 335 | United States | Cited as an example of the "highest market price of the security within a reasonable time of the plaintiff’s discovery of the breach” standard used in New York for stock and securities generally. |
| H&P Investments v Ilux Capital Management LLC | Utah Court | Yes | 500 P.3d 906 | United States | Cited as an example of a jurisdiction that applies the New York rule only in the context of claims for the conversion of shares, but do not apply that rule in usual breach of contract claims, including those involving non-delivery of shares. |
| Stanford International Bank Ltd (in liquidation) v HSBC Bank plc | UK Supreme Court | Yes | [2023] AC 761 | United Kingdom | Cited for the principle that there is no such rule of law as the breach date rule. |
| Radford v De Froberville | High Court | Yes | [1977] 1 WLR 1262 | United Kingdom | Cited for the principle that the ordinary rule is that damages for breach of contract fall to be assessed at the date of the breach. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Evidence Act 1893 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Multichain Bridge
- Wrapped Assets
- Source Assets
- Liquidity Facility
- FTM
- FTM (ERC-20)
- Stablecoins
- Decentralised Management Account
- Security Breach
- Cryptocurrency
- Blockchain
15.2 Keywords
- cryptocurrency
- damages
- breach of contract
- multichain
- fantom
- assessment
- security breach
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Damages Assessment | 90 |
| Cryptocurrency Law | 85 |
| Breach of Contract | 75 |
| Digital Assets | 70 |
| Commercial Disputes | 60 |
| Misrepresentation | 50 |
| Banking and Finance | 30 |
| Commercial Law | 30 |
| Litigation | 25 |
16. Subjects
- Cryptocurrency
- Contract Law
- Damages
- Breach of Contract