The High Court of England and Wales has ruled that individuals and entities may now be served legal documents via non-fungible tokens (NFT).
Fabrizio D’Aloia, the founder of the Italian online gaming business Micrograme, has been granted permission to sue an unknown individual by sending documents through the blockchain. NFTs took the spotlight during the 2021 crypto craze. NFTs refer to digital assets that link ownership to unique physical or digital items. Each NFT is one of a kind and cannot be replicated in any legitimate way. NFTs became popular to assign ownership over digital art but also have utility when pertaining to real estate, music, videos, and now legal documentation.
As this UK case concerns legal proceedings against an unknown actor, the Court allowed Mr D’Aloia to “airdrop” the legal documents to the individual’s cryptocurrency wallet. Airdropping in cryptocurrency refers to the unsolicited distribution of a crypto coin or token. This is generally done for free and for marketing purposes. Mr D’Aloia is seeking to recover lost crypto funds that were misappropriated by the unknown individual in a fraudulent clone online brokerage that duped Mr D’Aloia for almost $2.33 million. Unfortunately for Mr D’Aloia, without knowing the identity or location of the individual, legal service via NFT airdrop seems to be the only option.
The UK Court has taken a gargantuan step in terms of legal delivery. The decision pushes for greater consumer protections, responsible practices, and hopes to impede cryptocurrency scams. Moreover, this progressive approach seems to advocate for alternative service and evolving practices in the digital era. However, commentators are unsure how enforceable such legal documents will be and believe that the Courts act will have limited practical effect without new case law or clear regulation.