Blockchain News

NFT-Delivered Court Orders an Answer to Blockchain-Related Litigation: Lawyers

Regardless of whether the defendant gets the court notice, being served by NFT, according to legal experts, “limited what the defendant” can do with the monies.

According to crypto attorneys, non-fungible tokens (NFTs) are becoming an increasingly popular alternative for serving defendants in blockchain-based crimes who would otherwise be unreachable.

Using the recent year, there has been a surge in litigation given over NFTs in cases where persons accused of blockchain crime were uncontactable via standard communication methods.

The United States District Court for the Southern District of Florida allowed a request by the United States law firm The Crypto Lawyers to serve a defendant through NFT in November 2022.

While the defendant’s identity remained unknown, the plaintiff accused the defendant of stealing cryptocurrencies worth $958,648.41.

After the plaintiff presented the court with a declaration from a crypto investigator confirming the stolen cryptocurrency transactions, the judge granted the request to serve this defendant via NFT as a “fairly calculated” method of giving notice.

According to Agustin Barbara, managing partner of The Crypto Lawyers, serving a defendant via NFT is a great tool for blockchain crime because it is “nearly hard to identify rogue actors.”

Barbara said that summoning an unknown person using NFT is accomplished by transferring the NFT to the defendant’s blockchain wallet address, which houses the stolen funds.

He stated that this strategy is utilised to contact the accused when more traditional channels such as email or postal mail are ineffective owing to the unknown identity.

Barbara explained that the content of an NFT court notice would typically include the notice of the legal action with summons language, a hyperlink to a designated website containing the notice and copies of the summons, complaint, and all filings and orders in action, and a copy of the summons, complaint, and all filings and orders in action.

While the “wallet may not be used by the defendant,” and thus the summons notification may not come to the defendant’s attention, it can drastically limit activity on the wallet and other wallets that have recently interacted with it, according to Michael Bacina, digital asset lawyer at Australian law firm Piper Alderman.

Bacina proposed that it stamps that wallet address with a black mark, implying that all other wallet addresses that have recently transacted with that address may be regarded suspicious, affecting their activity as well. He mentioned that businesses might not want to accept transactions where a wallet is too near to one that is being sued.

The advantage of the “open nature of public blockchains,” according to Bacina, is that it is easy to determine if a wallet is in use, which shows to be a handy way of determining if the NFT serving has potentially been seen.

Other court orders were served by NFTs in 2022.

In June 2022, an international legal firm filed a restraining order through NFT, and it only took an hour between the asset recovery team airdropping the NFT to the wallet address and 1.3 million $USDC being frozen on the chain.

That same month, Giambrone & Partners reported that it had been the first law practise in the United Kingdom and Europe to acquire approval from a High Court judge to serve document proceedings via an NFT.


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