A federal judge in Florida has ruled in favor of a plaintiff who sued anonymous hackers and issued a formal notice of the legal action via NFT, according to recent court filings.
The ruling, a default judgment from Judge Beth Bloom of the United States District Court Southern District of Florida, declares that the unidentified hackers are on the hook for the $971,291 worth of USDT (Tether) that they stole from plaintiff Rangan Bandyopadhyay’s Coinbase wallet in December 2021.
The perpetrators have been ordered to pay the equivalent amount back to Bandyopadhyay, with the amount set to accrue interest on that debt until it is paid in full.
Because of the blockchain, it remains unclear who these digital thieves were, let alone where they reside. That’s why Judge Bloom permitted them to be served via NFT in last week’s case, using the same on-chain addresses they used to steal from Bandyopadhyay.
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The hackers tricked the plaintiff into linking his Coinbase wallet to a fake liquidity mining project and then drained money from that wallet to their own. After several transfers, the funds ended up in a Binance Exchange Pool.
Judge Bloom’s determination that NFTs constituted a legitimate form of legal notification for these defendants marks the first time an American federal court has allowed defendants to be served by NFT.
Before last week’s ruling, a New York county court permitted the practice early last year. Last summer, a U.K. court ruled that NFTs are an acceptable method of notifying anonymous, on-chain defendants in that country.
The trend marks a turning point for legal systems that are desperately trying to catch up with a slew of new types of crime facilitated by blockchain technology. Crypto-savvy hackers routinely create elaborate networks of fake companies to persuade unsuspecting victims to link their wallets, which are drained shortly thereafter. In an ecosystem where even high-profile, legitimate actors routinely operate anonymously, it can be hard to discern the legitimate from the dubious.
It is even harder to get digital funds and assets back once they’re stolen.
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