Can Legal Notices Be Served Through NFTs in Fraud Cases?

October 31, 2024

In a groundbreaking legal victory, Akin successfully secured approval from the U.S. Bankruptcy Court for the Southern District of New York to serve legal notices via non-fungible tokens (NFTs). This decision, delivered by Chief Judge Martin Glenn in the case In re Celsius Network LLC, No. 22-10964 (MG) (Bankr. S.D.N.Y.), represents a significant shift in how legal documents can be conveyed in cases involving digital assets. The innovative motion approved by the court allows for legal notices to be airdropped directly into the digital asset accounts of defendants accused of holding fraudulently transferred assets. These NFTs, containing hyperlinks to the relevant complaints and summonses, ensure that the parties involved receive necessary legal documents, as they will be directed to the digital wallets used in the alleged fraudulent activities.

The ruling by Judge Glenn validated that this method meets due process requirements, given the high probability that defendants will access the complaints and summonses through the NFTs sent to their wallets. The court’s decision is based on the notion that the ownership of these digital wallets has remained consistent since the transfers in question. This pioneering approach was led by Mitchell Hurley and his team at Akin, including Elizabeth Scott and Michael Stanley, marking a milestone achievement in the integration of digital solutions in legal proceedings.

The Trend Towards Digital Solutions in Legal Proceedings

In a landmark legal win, Akin secured approval from the U.S. Bankruptcy Court for the Southern District of New York to serve legal notices via non-fungible tokens (NFTs). Chief Judge Martin Glenn’s decision in the case, In re Celsius Network LLC, No. 22-10964 (MG) (Bankr. S.D.N.Y.), marks a revolutionary shift in delivering legal documents in digital asset cases. This innovative motion enables legal notices to be airdropped into the digital asset accounts of defendants accused of holding fraudulently transferred assets. These NFTs include hyperlinks to the relevant complaints and summonses, ensuring the involved parties receive essential legal documents through the digital wallets alleged to have been used in fraudulent activities.

Judge Glenn confirmed this method meets due process requirements, given the high likelihood that defendants will access the summonses and complaints via the NFTs in their wallets. The court’s decision rests on the assumption that the ownership of these digital wallets has stayed consistent since the questioned transfers. This trailblazing approach was spearheaded by Mitchell Hurley and his team at Akin, including Elizabeth Scott and Michael Stanley, signifying a milestone in integrating digital solutions into legal proceedings.

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