Author: Syedur Rahman 2 August 2022
For the first time ever outside of the US, a court has allowed an order to be served on a defendant via a non-fungible token (Non-Fungible Token'>NFT).
The case of D’Aloia V Persons Unknown, Binance Holdings Limited and others was brought by a man who had cryptocurrency taken from him by unidentified fraudsters who were operating a fake online crypto brokerage.
In an attempt to regain his assets, Mr D’Aloia brought a legal claim. But such claims require the claim to be served on the defendants, which can be difficult in crypto-related cases where the defendants are often unknown. The claim has to be served in person or via first-class post, by leaving it at a certain address or by using a fax or other means of other electronic communication - and service by electronic means is only allowed where the defendant has indicated a willingness to be served in this way.
Under the UK’s Civil Procedure Rules, which govern such cases, a claimant can apply for permission to serve the claim in an alternative way. In the D’Aloia case, the High Court in London allowed it to be served by transferring it as a NFT on the blockchain to the cryptocurrency wallets that the defendants used in the fraud. The only time this has been done previously was in a New York case earlier this year.
While this a notable UK first in cryptocurrency cases, it also indicates a shift in the court’s position regarding alternative means of serving a claim. It shows that the courts of England and Wales are willing to adopt innovative and creative solutions to deal with the new set of difficulties that have developed from crypto-related claims.
Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, international arbitration, civil recovery, cryptocurrency and high-stakes commercial disputes.