Sonic Labs Secures Court Approval to Liquidate Multichain Foundation Amid Crypto Industry Shake-Up
May 15, 2025 – In a landmark ruling that could reshape the cross-chain crypto ecosystem, Sonic Labs has officially received court approval to liquidate the troubled Multichain Foundation, signaling the end of one of the most ambitious—but ultimately ill-fated—projects in decentralized finance (DeFi).
Once hailed as a critical bridge for blockchain interoperability, Multichain (formerly Anyswap) spiraled into chaos in 2023 after a series of mysterious technical failures and the reported disappearance of its CEO, Zhaojun. The protocol, which at its peak handled billions in total value locked (TVL), suddenly halted operations, locking up vast user funds and triggering panic across the DeFi space.
Now, after months of legal proceedings and pressure from affected stakeholders, Sonic Labs—a technology firm and one of Multichain’s largest institutional creditors—has secured the authority to begin a court-supervised liquidation process. The goal: to trace, recover, and distribute the foundation’s remaining assets to creditors and users.
A House of Cards
The fall of Multichain raised serious questions about the security and governance of decentralized protocols. Investigations revealed that the core of Multichain’s operations relied heavily on centralized control, with access to critical bridge infrastructure tied to a single individual—Zhaojun—who disappeared in mid-2023 amid rumors of a Chinese government probe.
In the vacuum, Sonic Labs stepped in as a key plaintiff, arguing that mismanagement and lack of transparency within the foundation constituted a breach of fiduciary duty to its users and partners. The court’s decision to approve liquidation now opens the door for forensic audits, asset tracing, and potential criminal referrals.
What Happens Next
Sonic Labs has outlined a multi-phase liquidation plan that includes the appointment of independent administrators, audits of on-chain and off-chain holdings, and a claims process for impacted users. Preliminary estimates suggest that up to $1.2 billion in assets may still be recoverable—though the true figure remains uncertain due to the opaque structure of Multichain’s operations.
“Today’s court decision is a major step toward justice for thousands of users left in the dark,” said a spokesperson for Sonic Labs. “We are committed to ensuring transparency and fairness throughout the liquidation process.”
The Multichain saga has already sent shockwaves through the crypto industry. Competing bridge protocols have since raced to implement decentralized key management, multi-sig verification, and other security upgrades in a bid to restore user confidence.
Meanwhile, regulators across Asia and Europe are closely watching the case, viewing it as a test for how decentralized organizations can be held accountable when centralized elements fail.
For now, the crypto world watches as Sonic Labs begins the arduous task of untangling the wreckage of what was once a DeFi cornerstone. Whether this leads to restitution—or more revelations of hidden liabilities—remains to be seen.