Case Details
- Citation: [2024] SGHC 173
- Title: FANTOM FOUNDATION LTD. v MULTICHAIN FOUNDATION LTD. & Anor
- Court: High Court (General Division)
- Originating Claim No: 621 of 2023
- Assessment of Damages No: 2 of 2024
- Judgment Date: 3 June 2024
- Date Judgment Reserved: 8 July 2024
- Judge: Mohamed Faizal JC
- Plaintiff/Applicant: Fantom Foundation Ltd
- Defendant/Respondent: Multichain Foundation Ltd; Multichain Pte Ltd
- Proceeding Type: Assessment of damages following a default judgment
- Legal Area: Damages (assessment); civil procedure (default judgment); valuation of cryptocurrency
- Statutes Referenced: Not stated in the provided extract
- Cases Cited: Not stated in the provided extract
- Judgment Length: 30 pages, 8,888 words
Summary
This decision of the Singapore High Court concerns the assessment of damages after the Claimant, Fantom Foundation Ltd, obtained a default judgment against the Defendants, Multichain Foundation Ltd and Multichain Pte Ltd. While the default judgment had already determined liability and granted consequential relief including damages “to be assessed” and an order relating to the delivery of 4.175m FTM (or, alternatively, its value), the present judgment focuses narrowly on the quantification of those heads of loss.
The court’s central task was to translate cryptocurrency-related obligations into monetary damages. In doing so, the court addressed the “valuation conundrum” that arises because cryptocurrencies trade in volatile markets and their value changes from moment to moment. The court ultimately awarded (i) US$58,620.55 for the damages claim and (ii) US$2,129,250 for the FTM claim, reflecting the sums sought by the Claimant in the assessment proceedings.
What Were the Facts of This Case?
The Claimant, Fantom Foundation Ltd, is an exempted foundation company incorporated in the Cayman Islands. It developed and operates “Fantom Opera Chain”, an open-source smart contract platform. The Claimant’s native cryptocurrency is “FTM”, which is used for transaction fees, governance, and staking/validation activities on the Fantom network. The judgment explains, in accessible terms, the broader cryptocurrency ecosystem and the different categories of digital assets relevant to the dispute, including native coins, tokens (non-native coins), stablecoins, and wrapped tokens.
Of particular importance is the distinction between “native” FTM on the Fantom chain and “wrapped” or tokenised representations of assets on other networks. The Defendants’ business model involved cross-chain bridging and the creation/redemption of wrapped tokens. The First Defendant, Multichain Foundation Ltd, operated the Multichain Bridge, a protocol that locks “source assets” on one blockchain and releases “wrapped assets” of equivalent value on another blockchain. The judgment likens the mechanism to an “IOU”: the locked collateral is intended to back the wrapped tokens, which can be unwrapped to recover the source assets when redeemed.
The Claimant’s damages arise from the loss of cryptocurrency assets allegedly deposited into the Multichain Bridge pursuant to three agreements. Two agreements were written: an Integration Agreement for integrating the Fantom blockchain with the Multichain platform, and a User Agreement setting out the terms for using the bridge. The third agreement was said to be inferred from a course of conduct. The Integration Agreement enabled various cryptocurrencies to be integrated, including stablecoins (USDC, USDT, DAI) and wrapped tokens (WEth and WBTC). The User Agreement, as pleaded and asserted by the Claimant, included key conditions such as the bridge being controlled by decentralised MPC nodes, the bridge holding source assets on a 1:1 basis as collateral custodian, and the entitlement of a bearer presenting validly encrypted wrapped assets to unwrap and collect the source assets.
As of 6 July 2023, the Claimant deposited source assets into the Multichain Bridge to mint wrapped assets on the other side. The deposits were said to have an equivalent value of about US$61,829.70, comprising USDT, USDC, and DAI. The judgment further notes that the parties also engaged in a “liquidity facility” arrangement, under which the Claimant provided liquidity to the First Defendant in tranches upon request. Although the extract provided is truncated after the introduction of the liquidity facility, the overall factual narrative is clear: the Claimant’s case was that the bridge’s operations and collateral arrangements failed, resulting in the loss of cryptocurrency assets and giving rise to the damages and alternative monetary valuation claims that were left for assessment.
What Were the Key Legal Issues?
The immediate legal issue was procedural and remedial: having obtained a default judgment that granted relief “to be assessed”, what is the correct measure of damages for cryptocurrency losses? In particular, the court had to determine the monetary value of the relevant digital assets at the appropriate time, and to do so in a way that is consistent with established principles governing damages assessment.
A second, more substantive issue concerned valuation methodology. Cryptocurrency markets are inherently volatile, and the “market value” of a coin can change rapidly. The court therefore had to grapple with the “valuation conundrum” of which point in time should be used to value cryptocurrency for damages purposes. This question is not merely technical; it affects the quantum of damages materially and requires the court to select a valuation date that best reflects the compensatory purpose of damages.
Finally, because the default judgment included an order for delivery of 4.175m FTM “or, in the alternative, the value of the said FTM”, the court had to determine how to convert a specific quantity of FTM into a monetary figure. That required the court to identify the relevant valuation date and to apply a market value consistent with the evidence and the Claimant’s pleaded case, while also ensuring that the assessment did not become speculative.
How Did the Court Analyse the Issues?
The court’s analysis begins by framing the assessment as arising from a default judgment. Since the Defendants did not participate in the assessment proceedings, the court proceeded on the basis of the Claimant’s asserted facts. The judgment emphasises transparency and explains that the facts set out are primarily those asserted by the Claimant. This matters because, in an assessment following default, the court must still be satisfied that the damages claimed are properly quantified and legally coherent, even if the defendant does not contest the evidence.
On the damages claim (separate from the FTM delivery/value head), the court ultimately awarded US$58,620.55. The extract indicates that these were the sums sought by the Claimant before the court. While the truncated portion of the judgment prevents a full reproduction of the evidential steps, the structure of the judgment (as reflected in the headings) suggests that the court considered the nature of the losses, the relevant agreements, and the valuation approach for the assets implicated in those losses.
The most distinctive part of the judgment is its treatment of cryptocurrency valuation. The court provides a conceptual overview of cryptocurrency types and explains how wrapped assets and collateralised bridging arrangements are intended to preserve value equivalence. It then turns to the practical difficulty: because cryptocurrencies trade on markets, their value at any one point in time is not fixed. The court therefore addresses the question of “which point in time should one use to value cryptocurrencies?” This is a classic damages problem in a new technological context. The court’s headings indicate that it first addresses the general concept of ascertaining market value at a point in time, then considers the specific choice of the valuation point.
Although the extract does not include the detailed reasoning passages, the court’s conclusion is clear: it awarded US$2,129,250 in relation to the FTM claim. Given the alternative nature of the order (delivery of 4.175m FTM or its value), the court’s reasoning necessarily involved selecting a valuation date and applying the market price of FTM at that time to compute the monetary equivalent. The judgment also notes that market movements can be significant upon the issuance of the decision, and it references commentary in the cryptocurrency world suggesting that FTM reached a new 2024 peak when the default judgment was announced. This contextual observation underscores why the “valuation point” question is central: different dates could yield different prices and therefore different damages.
In selecting the valuation approach, the court’s reasoning is guided by the compensatory function of damages: the claimant should be put, as far as money can do, in the position it would have been in had the breach not occurred. In cryptocurrency cases, that typically means valuing the lost asset in a manner that is fair, non-speculative, and tied to a defensible market reference. The court’s final awards being the sums sought by the Claimant suggests that the Claimant’s proposed valuation date and market-value evidence were accepted as appropriate for the assessment exercise.
What Was the Outcome?
The court granted the Claimant the sum of US$58,620.55 in relation to the damages claim. In addition, the court granted US$2,129,250 in relation to the FTM claim. These were the sums sought by the Claimant before the court, and the judgment reflects that the assessment proceeded on the basis of the Claimant’s evidence and pleaded valuation methodology.
Practically, the outcome converts the default judgment’s alternative relief—delivery of 4.175m FTM or its value—into a monetary award. This is significant for enforcement and for claimants who may not be able to obtain the relevant cryptocurrency assets directly, particularly where the assets are locked, inaccessible, or otherwise unavailable due to the alleged failure of the bridge/custody mechanism.
Why Does This Case Matter?
This case matters because it provides a Singapore High Court articulation of how damages can be quantified where the subject matter is cryptocurrency and the relief includes both monetary damages and an alternative valuation of a specific quantity of a coin. For practitioners, the judgment is a useful reference point on how courts may approach the “valuation conundrum” created by volatile crypto markets, especially in the context of default judgments where the defendant does not contest the assessment.
From a precedent and persuasive standpoint, the decision is likely to be cited in future disputes involving digital assets, particularly where claimants seek damages measured by reference to market value at a chosen time. The court’s explicit engagement with the question of “which point in time should one use to value cryptocurrencies?” signals that valuation date selection is not a mere arithmetic step; it is a legal and evidential choice that can drive the quantum of damages.
For claimants and defendants alike, the case highlights the importance of presenting a coherent valuation methodology supported by market data and tied to the compensatory purpose of damages. Even where liability is established by default, the assessment stage remains a critical battleground for quantum, and the court’s willingness to accept the Claimant’s valuation approach (as reflected in awarding the exact sums sought) suggests that well-evidenced valuation proposals can be decisive.
Legislation Referenced
- Not stated in the provided extract.
Cases Cited
- Not stated in the provided extract.
Source Documents
This article analyses [2024] SGHC 173 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.