Service Of Proceedings Via NFT On The Blockchain - The Future?

• Published date: 18 July 2022
• Subject Matter: Media, Telecoms, IT, Entertainment, Technology, Social Media, Fin Tech
• Law Firm: Matheson
• Author: Ms Karen Reynolds, Michael Byrne and Samuel Elliott

Developments in the UK

In a first for the UK courts, the High Court of England and Wales in the case of D'Aloia v. (1) Persons Unknown (2) Binance Holdings Limited & Others has granted an application for service of court proceedings by way of the transfer of a non-fungible token ("NFT") recorded to a decentralised blockchain.

The claimant, who founded an online gaming service provider, brought proceedings against a number of cryptocurrency exchanges and others for alleged misappropriation of '1.8 million of Tether and '190,000 of USD Coin. The claimant alleged that individuals had impersonated an online brokerage, and induced him to transfer funds from his crypto wallets to their platform. In seeking interim relief, counsel for the claimant explained to the court that it was apparent that the (alleged) misappropriated funds had been transferred to private wallets and cryptocurrency exchanges. In the course of granting interim relief, the Court also made an order that notice of the proceedings could be served on the defendants by way of an NFT to be transferred to the private wallets that allegedly held the claimant's stolen cryptocurrency.

Substituted Service in Ireland

Although this precise question has not yet come before them, the Irish Courts have demonstrated openness to evolving technology and as such have granted novel orders for substituted service. Under the Rules of the Superior Courts, the Courts can grant an order for substituted service where 'the plaintiff is from any cause unable to effect prompt personal service'. ¹

The Irish Courts granted the first order for substituted service on social media ten years ago.² In that case, Peart J granted that an order for substituted services of proceedings by way of a private message on Facebook. The defendant was not resident in Ireland, and the Court was satisfied that extensive (but unsuccessful) efforts had been made to serve the defendant in person, and that the defendant actively used the account that was to receive the summons.

In a recent High Court case, McDermott J granted an order for substituted service against various Russian individuals alleged to have conspired to deprive the plaintiff of the benefit of their shares in a Russian company.³ As the Court noted, substantial procedural delays typically arise in respect of service by way of the Russian designated...