The law firms Holland & Knight and Bluestone have served a defendant in a hacking case with a non-fungible token (NFT) temporary restraining order, the first known legal process to be facilitated by a digital asset.
The call “service token” either “Service NFTs” was handed over to an unnamed defendant in a hacking case involving LCX, a Liechtenstein-based cryptocurrency exchange that was hacked in January for nearly $8 million. As Cointelegraph reported at the time, the attack compromised the platform’s online wallets, resulting in the loss of Ether (ETH), USD Coin (USDC), and other crypto assets.
Holland & Knight has become the first law firm to serve a defendant by #NFTwhich was created and airdropped by our #AssetRecovery Team. Learn more from our client @LCX. https://t.co/wWs2cOVVY1 #crypto #blockchain #legalinnovation pic.twitter.com/mo7VaAKEgo
— Holland & Knight (@Holland_Knight) June 8, 2022
LCX reported on June 7 that approximately 60% of the stolen funds are now frozen with open investigations in Liechtenstein, Ireland, Spain and the United States. Approximately $1.3 million in USDC was frozen by the Center Consortium, an organization founded by USDC issuer Circle and Coinbase, based on an injunction from the New York Supreme Court.
LCX said that the funds were laundered through cryptocurrency mixer Tornado Cash, but were later traced through “forensic algorithmic analysis.” The analysis also allowed the company to identify the attacker’s wallets.
You’ve been served! #subpoena
About 1 hour ago, @LCX‘s lawyers served a “Service NFT” to a subject address. Approx. 1.3M $USDC frozen on chain.Additional details and statement by LCX will be published within 24h.
Service NFT https://t.co/i3D5huCZz7
— Monty Metzger (@montymetzger) June 7, 2022
In light of these conclusions, Holland & Knight and Bluestone, the law firms representing LCX, sent the anonymous defendant a temporary restraining order that was issued on-chain using an NFT. This method “was approved by the New York Supreme Court and is an example of how innovation can provide legitimacy and transparency to a market that some believe is ungovernable,” LCX said.
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