UK Court Approves Proceedings to be Served via NFTs

UK Court Approves Proceedings to be Served via NFTs

A claimant has been granted permission by the High Court of England and Wales to serve proceedings on ‘persons unknown’ over the blockchain by Non-Fungible Tokens (NFTs).

Fabrizio D’Aloia, the founder of online gambling company Microgame, is suing ‘persons unknown’ who are said to have misappropriated around £1.8m worth of Tether and about £190,000 of USD Coin between December and the end of May.

He is said to have been ‘conned’ by individuals who imitated online brokerage TD Ameritrade with the website and induced him to transfer funds from his crypto wallets to trade on the platform, before he realised he was ‘a victim of fraudulent activity’ in May.

The court heard that investigators working for D’Aloia have found that almost all of the assets have been transferred to a ‘number of private addresses’ and cryptocurrency exchanges.

According to a press release by Giambrone & Partners LLP, the law firm handling the case, the NFT, which will convey a “worldwide freezing injunction,” will be delivered as an airdrop to two wallets connected to the unknown defrauder of their client Fabrizio D’Aloia, an Italian engineer and the founder of online gambling joint stock company Microgame.

“This order is a noteworthy development in the area of service of court documents and a welcome example of a court embracing new technology,” the firm’s press release said.

At an interim relief hearing last month, Mr Justice Trower ruled that there is a serious issue to be tried in respect of D’Aloia’s claims of fraudulent misrepresentation and deceit, unlawful means conspiracy and unjust enrichment as against persons unknown.

The judge also granted D’Aloia permission to serve the proceedings on persons unknown via an NFT, which he described as ‘a form of airdrop into the tda-finan wallets in respect of which [D’Aloia] first made his transfer to those behind the tda-finan website’.

‘There can be no objection to it,’ Trower said. ‘Rather it is likely to lead to a greater prospect of those who are behind the tda-finan website being put on notice of the making of this order, and the commencement of these proceedings.’

Giambrone & Partners, which represented D’Aloia, said the ruling is ‘a welcome example of a court embracing new technology’, adding: ‘It is also a significant judgment as it demonstrates how England and Wales is one of the best jurisdictions in the world, if not the best, when it comes to protecting victims of cryptoasset fraud.’

The firm said the case is the first time permission to serve court proceedings on unknown fraudsters by NFT has been granted in Europe and is second only to an order made by the New York Supreme Court in June.

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