The crypto world's new litigation model? Celsius wants to recover funds but can't find anyone, can the lawsuit be served using NFTs?

crypto world litigation new model

Is your impression of Non-fungible Token still stuck in art auctions or meme culture? When everyone thought Non-fungible Token was dead, they did not realize that Non-fungible Token is becoming an indispensable technology. A recent "legal service case" directly subverted most people's traditional perceptions of Non-fungible Token and legal procedures.

This case involves a Cryptocurrency lending company - Celsius Network, which announced its successful emergence from bankruptcy at the end of last year after experiencing a year-long shadow of bankruptcy, and has begun to repay creditors with over 3 billion US dollars in Crypto Assets and fiat currency according to the restructuring plan.

However, after bankruptcy, Celsius urgently needs to recover assets to repay creditors. According to their investigation, there is a suspected fraudulent fund transfer involving several Wallet Addresses. However, due to the anonymous nature of the blockchain, Celsius cannot determine the actual holders of these Wallets or even find basic contact information.

In the traditional legal framework, such a situation would usually lead to a legal deadlock, but Celsius has come up with a refreshing solution: directly airdropping the complaint in the form of a Non-fungible Token to the relevant Wallet Address.

Why use Non-fungible Token to deliver legal documents?

This Non-fungible Token is not the typical digital collectible as we know it, but rather embedded with a hyperlink that connects to a dedicated website detailing the complaint and related legal documents.

To track whether the document has been received and viewed, Celsius also hired a professional digital consulting company FTI Consulting, which will monitor whether the Wallet has received Non-fungible Tokens, track on-chain activities, and record the specific dates and times when hyperlinks are clicked, ensuring that the documents are delivered while also meeting legal due process requirements.

According to the laws of New York, when traditional delivery methods are not feasible, the court may allow 'alternative service', which must be reasonable and able to provide the defendant with the maximum possible notice of the relevant lawsuit.

In this case, Martin Glenn, the bankruptcy judge of the Southern District of New York (SDNY) responsible for the trial, believes that traditional mail or face-to-face delivery is completely impractical due to the anonymous nature of blockchain. Therefore, Non-fungible Token Airdrop is the best way.

Finally, Martin Glenn agreed to serve legal documents on the anonymous defendant via Non-fungible Token Airdrop. This is not only a new example of blockchain technology application, but also a bold innovation of blockchain technology in traditional legal services.

Martin Glenn specifically pointed out that the use of Non-fungible Tokens not only meets the technical feasibility but also complies with the legal requirements for due process, as these Non-fungible Tokens are airdropped directly to the defendant's Wallet, and their opening status can be tracked throughout, ensuring that the documents are received and reviewed: 'The email Address paves the way for legal service in the Internet era, while the Wallet Address is a continuation of the Blockchain era.'

The potential of Non-fungible Tokens as legal instruments

This ruling is undoubtedly a landmark case, highlighting the unique advantages of Blockchain technology - transparency and Traceability, which can more intuitively ensure the receipt of the recipient and effectively avoid the situation where the email is mistakenly classified as junk mail or ignored, compared to emails or other digital methods, Non-fungible Token Airdrop.

However, this new model also comes with challenges. For example, can the acceptance of Non-fungible Tokens be considered equivalent to traditional delivery? If the defendant argues that they cannot understand the intent of the Non-fungible Tokens due to technical or language barriers, can the law recognize this as valid notice?

In addition, how to avoid Non-fungible Token being maliciously tampered with or intercepted is also a question that needs further exploration.

However, through this case, we can easily see that the application of blockchain technology is far more than just in the financial sector, but also has the potential to have an impact in legal, medical, educational, and many other industries.

【Disclaimer】The market carries risks, and investments should be made with caution. Analyst views are for reference only. Users should consider more diverse indicators to determine whether to invest and consider whether any opinions, perspectives, or conclusions in this article are applicable to their specific situation. Investment based on this is at one's own risk.

'New litigation model in the crypto world? Celsius wants to recover funds but can't find people. Can NFT be used to send the lawsuit?' This article was first published in 'encryption city'