The U.K. High Court has permitted a claimant to serve court proceedings via an NFT on the blockchain in a ruling with potentially far-reaching implications.
The order, which was granted on 24 June but only made public this week, allowed an Italian businessman to serve proceedings on ‘persons unknown’ by way of a non-fungible token drop to two wallets into which he had initially deposited cryptocurrency.
Fabrizio D’Aloia, an Italian engineer and founder of online gambling joint stock company Microgame, filed a claim against four cryptocurrency exchanges and a software company after cryptocurrency owned by him was said to have been misappropriated by ‘persons unknown’ operating a fraudulent clone online brokerage.
Giambrone & Partners, the law firm acting for the claimant, described the ruling as “a welcome example of a court embracing new technology”.
The firm added that the ruling states that cryptocurrency exchanges, including Binance and OKX, hold the stolen cryptocurrency as trustees, meaning that they are responsible for making sure it is not moved on or withdrawn from their exchanges.
Christopher Whitehouse, a senior associate at RPC, said he considered this element of the ruling to be even more significant than the service by NFT component.
“Crypto exchanges will be following this very closely, and it’s massively disadvantageous to them,” he said. “They certainly don’t want to be on the hook to transfer money back to people who have been defrauded.”
He added that he thought the ruling could potentially pave the way for further crypto litigation: “Anything that makes it easier to recover stolen crypto is helpful, and gives greater certainty to victims of crypto fraud that they can recover their assets.”