The UK court has approved allowing anyone to sue another individual or blockchain participant on the blockchain directly with a nonfungible token. The court documents were signed this week.
First to sue: Online gambling company sues Binance Holdings
This week, according to a public legal document, a UK judge gave the go-ahead for anyone to present legal documents over the blockchain ledger by a nonfungible token for the first time. This further explains the various use cases that NFTs have.
Non-fungible tokens (NFTs) are a type of financial security made up of digital data kept on a distributed ledger called a blockchain. An NFT’s ownership is documented in the blockchain and is transferable by the owner, enabling the sale and trading of NFTs. They are typically used as proof of ownership of a piece of digital art.
The decision stems from a lawsuit filed by online gaming company founder Fabrizio D’Aloia, who is suing cryptocurrency exchange Binance Holdings and other platforms. After his cryptocurrency holdings were falsely copied on the brokerages, D’Aloia filed the claim.
In line with this claim, the court ruled that the exchanges are responsible for ensuring that the stolen crypto funds are not taken out of their systems.
The blockchain suing service will now be provided via airdropping the court documents using NFT into the two wallets that D’Aloia originally used and that the thieves seized. According to law firm Giambrone & Partners LLP, this opens the door for victims of cryptocurrency fraud to file lawsuits against unidentified thieves in the UK. A similar decision to permit service through an NFT was made by a US court in June.
“This is so important because it shows the court’s willingness to adapt to new technologies and embrace the blockchain and actually step in to help consumers where previous legislation and regulators simply could not do that,” Joanna Bailey, an associate lawyer from Giambrone & Partners LLP who worked on the case, said.
D’Aloia claimed to have been tricked into depositing roughly 2.1 million USDT and 230,000 USDC into two wallets that later turned out to be fake by an online brokerage. According to Bailey, the court’s decision enables D’Aloia to file a lawsuit against the creators of the fraudulent platform by delivering the court paperwork to the two wallets via an NFT drop.
D’Aloia noted that Binance, Poloniex, Gate.io, OKX, and Bitkub were the locations where his cryptocurrency was stored. D’Aloia received a court order last month prohibiting the exchanges from relocating such assets.
