In D’Aloia v Persons Unknown & Others, the High Court held that a party can use a non-fungible token (NFT) to serve legal proceedings on an anonymous defendant in an action to recover stolen cryptocurrency. This is the first time the English courts have permitted the service of documents via blockchain, illustrating their willingness to adapt and use novel technologies in the interests of justice.
A Non-Fungible Token Fraud
Mr D’Aloia alleged that he was the victim of fraud perpetrated by persons unknown who were behind the website www.tda-finan.com. He claimed he was scammed into transferring cryptocurrency to the web platform and commenced proceedings in the English courts against these persons unknown but was unable to serve the relevant legal documents by the usual methods of service due to his inability to identify the prospective defendants. As a result, he applied under CPR 6.15 for an order for alternative service and asked the court to allow service by NFT and email. Under CPR 6.15, the court will only make an order for alternative service if there is a ‘good reason’ to do so.
The High Court allowed service of court documents to take place by way of an NFT airdrop to the two online wallets that Mr D’Aloia had first made his cryptocurrency transfers into, as well as by email. Mr Justice Trower found that there could be no objection to such a request; it was likely to lead to a greater prospect of those who were behind the ‘tda-finan’ website being put on notice of the commencement of the proceedings.
Alternative service via various online methods has previously been authorised by the English courts under CPR 6.15, including Instagram and Facebook, but this is the first time that permission has been given for service through the means of blockchain, a distributed ledger technology. With crypto-assets and cryptocurrencies becoming more commonplace in society, this decision is a huge step forward for victims of crypto-asset fraud where more conventional methods of service are not generally viable because the identity of the fraudsters is unknown.
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