In the case under consideration, the fraud victim sued a number of cryptocurrency exchanges: Binance, Poloniex, gate.io, OKX and Bitkub. Fabrizio D’Aloia, the complainant, is an Italian engineer and founder of the Microgame gaming platform, and he is represented by a well-known British law firm. According to the reconstruction of the facts, the fraudulent broker allegedly contacted D’Aloia and convinced him to transfer 2.1 million Tether (USDT) and 230,000 USD Coins (USDC) to two different crypto wallets. The stolen digital currencies were then physically placed on five exchanges linked to wallets.
The court ruling, dated June last year, first found the exchange platforms responsible, given evidence that they were storing cryptocurrency traceable to D’Aloia. He then approved the trial by sending Non-Fungible Tokens to the two wallets used in the scam.
NFTs play a key role in this trial, which otherwise could not even take place due to the inability to notify the perpetrators of the scam, about whom nothing is known except for the crypto wallets addresses.
Thus, the UK will become the venue for the first trial in which the notification of the parties involved will be carried out through NFT. The law firm defending the victim has issued a press release detailing the case.
The role of NFT during the trial
First, the lawyers clarified the position of the exchanges, which the court called “constructive trusts”, that is, custodians and administrators of stolen cryptocurrencies. They stressed that this type of fraud is quite common, but it is difficult to pursue because crypto wallets are anonymous. This is where NFTs come to help, since notifications can be made via them even if only the cryptographic address is known.
To understand what role NFT plays in this case, you need to consider that three parties are involved in it: the victim, unknown scammers and crypto exchanges where the stolen cryptocurrencies are located. To start a trial involving “unknown persons”, it is necessary that all three parties are notified of the trial.
The problem with this type of fraud is that nothing can be presented to the person who committed the crime, since only the wallet address is known. But if documents and papers cannot be delivered in paper or classic electronic form (PDF or JPEG) to this address, NFTs can still be sent.
Practical application of NFT: a tool for overcoming legal obstacles
Until now, in the UK, the filing of a lawsuit could be carried out by mail, physical delivery to known addresses, as well as through “electronic communication”. The judge in this case interpreted NFT as a form of electronic communication. But the malleability of the UK court is important, which has decided to adapt to blockchain technology where the existing regulation has obvious limitations.
This way will allow many victims affected by the same fraud to act legally, even if no data other than the wallet address is unknown. In practice, the NFT act is sent and transmitted to the incriminated wallets, which allows the legal process to continue at all its stages, since the notification has been received.
In short, NFTs have become a way to overcome a legal obstacle in the interests of consumers, much to the chagrin of those who called them simply a “speculative bubble.” Besides, their practical application is spreading like wildfire, one has only to think about using NFT to sell tickets to events.