The Singapore High Court has made a groundbreaking decision by allowing financial investigation firm Intelligent Sanctuary (iSanctuary) to attach nonfungible tokens (NFTs) containing a legal document to cold wallets associated with a hack. This decision, reported by United Kingdom-based iSanctuary and local press accounts, has significant implications for the use of NFTs in enforcing court orders and tracking illicit funds.
The court-issued worldwide freeze order was tokenized as soulbound NFTs and permanently attached to the wallets in question. Although the NFTs will not prevent transactions with the wallets, they serve as a warning to counterparties and exchanges that these wallets were involved in a hack. Additionally, iSanctuary claimed that they have developed a means of tracking funds leaving the wallets by utilizing the NFTs.
iSanctuary, on its website, provided details about a case where a businessperson lost $3 million in crypto assets. Thanks to the efforts of iSanctuary’s financial and crypto investigators, the stolen funds were tracked. The evidence was presented to the Singapore High Court, which granted a worldwide injunction based on the on-chain and off-chain evidence. The court accepted the method of service via NFTs, making it the first time the Singapore High Court has issued such an injunction.
The producer of the NFTs, named Mintology, was indirectly confirmed by Mintable founder Zach Burks in a Twitter post. Mintable is a Singaporean NFT studio known for creating the Mintable app that supports minting NFTs on the Layer 2 Immutable X protocol.
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According to The Straits Times, the case is related to a stolen private key, and Singapore-based crypto exchanges were involved in laundering the funds from the hack. The fraudsters involved in the case were purported to be from Singapore, and the investigation spans countries such as Spain, Ireland, Britain, and other European countries.
iSanctuary founder Jonathan Benton noted that this decision is a game changer, allowing for quick enforcement of court orders. He highlighted the ability to police the blockchain, identify those holding illicit assets, and serve civil or criminal orders using NFTs.
This use of NFTs to enforce court orders is not unique to Singapore. NFTs have also been used to deliver court summonses in other countries, such as Italy and the United States. The growing acceptance of NFTs in the legal landscape is changing how courts and investigators handle cases involving crypto assets.
The decision by the Singapore High Court serves as a landmark moment in the adoption of NFTs for legal purposes. It demonstrates the court’s recognition of the value and effectiveness of NFTs in tracking and identifying illicit funds. This development could pave the way for more courts and regulators to embrace NFTs as a tool for investigating and prosecuting crimes involving crypto assets.
Moving forward, it will be essential to monitor how this decision influences the use of NFTs in other jurisdictions. As more cases involving crypto assets arise, the use of NFTs could become even more widespread in legal proceedings. This could provide authorities with a powerful tool to combat money laundering, fraud, and other illicit activities in the crypto space.
Overall, the Singapore High Court’s decision to allow the attachment of NFTs to cold wallets associated with a hack sets a significant precedent. It showcases the potential of NFTs in the world of financial investigations and legal enforcement. As the adoption of NFTs continues to grow, it will be fascinating to see how they are utilized in future cases and how they contribute to a more secure and transparent crypto ecosystem.
