NFTs
Served by a cartoon monkey? Summons via NFTs are here
Serving a complaint and court summons on a defendant is one of the first steps in a court case. Identifying who the accused is and where he or she is can be a challenge, especially when the alleged unlawful acts occurred in cyberspace under the guise of anonymous accounts.
Courts have routinely permitted service via email and other digital messaging platforms when in-person service is impossible. Now, jurisdictions across the country are allowing “blockchain service” as a new method for notifying defendants about claims against them.
The cultural relevance of non-fungible tokens (NFTs) may be at an all-time low, as evidenced by the recent performance of Bored Monkey Yacht Club. But alternative uses of the technology persist in the contentious space.
Blockchain service spreads to federal courts
In 2022, the New York County Supreme Court of New York became the first court in the country to grant the movement from a cryptocurrency exchange platform to alternative process services. The court allowed the platform to send a legal subpoena directly to crypto wallets associated with an alleged crypto theft. The identities of the individuals associated with the wallet were completely unknown, and the defendant named in the lawsuit was “1.274 million US dollar coin.” The court reasoned that although this particular method of notification was a matter of first impression, it was permitted by the section 308 of New York Civil Practice Law and Rules.
Since then, the federal district courts of Fifth, NinthIt is Eleventh all circuits have allowed service through blockchain in cases involving cryptocurrency fraud. It is reasonable to assume that this form of service could be implemented in any case where defendants trade cryptocurrencies and traditional methods of service are inadequate.
How it works?
Logistically, service via blockchain is carried out by sending a small amount of cryptocurrency to wallets associated with the defendant. For blockchains that support NFTs like Ethereum, call documents can be sent as a NFT directly to wallets associated with the alleged illicit transactions.
Bitcoin is the most popular blockchain network and the cryptocurrency of choice for bad actors. Ransomware cyber gangs, for example, often seek ransom payments in the form of Bitcoin. To serve a judicial intimation In bitcoin wallets, the “OP_RETURN” function is used to attach a message to the transferred cryptocurrency (similar to how the memo line is used in checks). In the “OP_RETURN” message, authors attach a hyperlink to the complaint and subpoena.
Requirements for Blockchain service
Electronic service of process is not explicitly permitted by the Federal Rules of Civil Procedure. For defendants located in the United States, service by electronic means must be authorized by state law to be adequate under FRCP 4(e). For defendants located outside the US, Rule 4(f) governs and the service must be in accordance with international agreements.
When a defendant’s location is completely unknown, some courts have been cautious about authorizing electronic service under Rule 4(f). In Chegg, Inc.the Northern District of California denied service by electronic means because the plaintiff was unable to prove that the defendant was outside the US.
There is also an element of constitutional due process that underpins both international and national notification methods. If the plaintiff cannot demonstrate that a particular method of notice would give the defendant sufficient notice in an alternative notice motion, the court will deny it.
Courts in jurisdictions that allow blockchain service have argued that this method of service satisfies due process because defendants are likely to return to their wallet to access their assets in the future.
For now, it appears that the blockchain service is set to become yet another method for delivering subpoenas to cyber criminals. Crypto thieves rarely (if ever) appear in court, making appeals based on improper service of process unlikely.
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