In what could represent a historic legal development for the crypto industry, the US law firm Holland & Knight served a defendant with a temporary injunction before the trial as a non-fungible token (NFT), acting in a legal case involving its client, the crypto exchange LCX.
For the “first time in history,” “a temporary restraining order (TRO) on a defendant had been served via NFT,” according to the exchange:
“This innovative method of serving an anonymous defendant has been approved by the New York Supreme Court and is an example of how innovation can bring legitimacy and transparency to a market that some believe ungovernable.”
Similarly, Monty Metzger, CEO and founder of LCX, tweeted that the court ruling “marks a historic milestone for the blockchain and crypto industry, as a sign of maturity and new transparency.”
In a statement, Holland & Knight said the NFT subpoena was created and flown to the defendant by the law firm’s asset recovery team. They called it a “service token” or “NFT service.”
The on-chain process, LCX said, can be found on the Ethereum (ETH) blockchain.
The case concerns a hack of the stock exchange that occurred in January. LCX said in a statement that the theft resulted in the loss of nearly $8 million in cryptocurrencies, but about 60 percent of the stolen funds were frozen. The attack targeted one of the exchange’s e-wallets.
“All other LCX hot wallets and confidential customer data were not affected in this security incident,” the statement said.
Law enforcement agencies from the United States, Liechtenstein, Ireland and Spain, which participated in an international investigation, tracked the funds laundered by the tornado Cash crypto mixer and identified the pirate wallets involved.
Some 500 ETH have been frozen under a Liechtenstein court order served by law enforcement in Ireland on Coinbase Europe, and an additional $1.3 million is frozen by the Centre Consortium based on a U.S. court order obtained from the New York Supreme Court, LCX said.