Suing Hackers Via NFT Gains Steam, But Effectiveness Remains Elusive
NFTs

Suing Hackers Via NFT Gains Steam, But Effectiveness Remains Elusive

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11 months ago

A federal judge in Florida just issued a $1 million default judgment against anonymous hackers in a case that expands the ability to serve lawsuits by NFT.

Suing Hackers Via NFT Gains Steam, But Effectiveness Remains Elusive

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A Florida man won a $1 million judgment against unidentified hackers in a lawsuit in which legal documents were served by NFTs sent to an anonymous crypto wallet address.

While it's not the first such case, it is the first heard — and first to reach a verdict — in a U.S. federal court.

Judge Beth Bloom of the U.S. District Court for the Southern District of Florida recorded a $1 million default judgment — plus interest — against the unknown hackers who stole $971,291 worth of USDT from the Coinbase wallet of Rangan Bandyopadhyay in December 2021.

The lawsuit was served by sending an NFT with the legal documents to the address to which the stolen tokens were sent after Bandyopadhyay's account was compromised when he linked his wallet to a fake liquidity mining project that drained his funds.

Which is more of a nice idea than an actual outcome, unless the hackers are eventually identified and captured.

Growing Acceptance

Still, it's the latest step in a growing legal trend, following similar rulings about the admissibility of using NFT and blockchain transactions in lawsuits mired in blockchain pseudonymity.

NFTs are especially suitable as their non-fungible — unique — nature makes them suitable for serving documents. The use of a hyperlink in the NFT can prove that someone opened it.

Last year, Liechtenstein-based cryptocurrency exchange LCX AG filed suit in a New York state court against a blockchain address which had been sent $8 million.

And in July, the High Court of England and Wales allowed Fabrizio D'Aloia, the owner of a gambling site who was robbed by scammers, to file suit via NFT. He was tricked into depositing $2.33 million in USDT and USDC stablecoins into fraudulent wallets, to which the NFT legal documents were sent.

NFTs are not the only use of legal action aimed at known but anonymous targets.

John Doe indictments served against DNA evidence collected at crime scenes are becoming a popular if controversial way to get around the statute of limitations in cases in which an otherwise unknown subject can be positively identified by their genetic code.<div><iframe width="100%" height="166" scrolling="no" frameborder="no" allow="autoplay" src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/1470311764&color=%23ff5500&auto_play=false&hide_related=false&show_comments=true&show_user=true&show_reposts=false&show_teaser=true"></iframe></div>

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