May 6, 2024
By Sharan Kaur Phillora
The Singapore High Court has authorized a freeze order linked to several cold wallets suspected of being involved in a crypto hack, as announced by the financial investigation firm, Intelligent Sanctuary (iSanctuary). This ruling marks a novel use of non-fungible tokens (NFTs) in legal procedures.
Here’s what we know:
The court’s order was uniquely implemented by converting the freeze order into soulbound NFTs, which were then attached to the associated wallets. While these NFTs do not restrict transactions, they serve as a clear warning to any potential trading partners or exchanges that these wallets have been implicated in unlawful activities.
The U.K.-based iSanctuary, which specializes in tracking and recovering stolen crypto assets, was hired by an entrepreneur who lost $3 million in cryptocurrencies. The firm was able to trace the stolen funds to a series of cold wallets. According to iSanctuary’s website, their senior investigator presented compelling on-chain and off-chain evidence to the court, leading to the issuance of this unprecedented worldwide injunction.
Although the soulbound NFTs do not hinder transactions, they enable the monitoring of any funds leaving the wallets, ensuring that any movement of the hacked assets can be tracked in real time. This innovative method received legal validation when the court accepted iSanctuary’s approach of serving the order via NFTs, produced by Mintology, an app developed by the Singaporean NFT studio Mintable.
The case, as reported by The Straits Times on October 17, involved stolen private keys and implicated Singapore-based crypto exchanges in laundering the proceeds from the hack. The complex case spans multiple countries, including Spain, Ireland, Britain, and other European nations.
iSanctuary’s founder, Jonathan Benton, highlighted the significance of this legal development, stating, “This is a game changer; it can happen in hours if needed. We can serve on wallets and start to police the blockchain, identify those holding illicit assets, serve civil or criminal orders, even red flags.”
This innovative legal approach could set a new standard for addressing cybercrimes and enforcing legal orders in the digital age.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
