January 17, 2025
By Our Correspondent
Hong Kong’s judiciary has begun implementing blockchain technology to issue legal notifications to illicit wallet addresses.
In a recent case involving two questionable Tron addresses, a court showcased this innovative method. The tokenized notification enables courts to freeze assets and issue injunctions, effectively eliminating the possibility for defendants to claim they were unaware of the legal actions against them.
Experts in the industry regard this initiative as vital in the fight against illegal activities within the cryptocurrency sector, offering a more effective way to communicate with anonymous wallet holders.
Joshua Chu, a cybersecurity advisor at Macro Systems, stated that this approach constitutes a legally valid means of communication. He further emphasized that it serves as a deterrent for centralized exchanges, prompting them to think twice before interacting with suspicious wallets.
“This new strategy is important because it eliminates the defense of ignorance,” Chu remarked. He also pointed out that non-compliance with the court order could lead to criminal repercussions.
Prior to the adoption of blockchain-based notifications, delivering legal documents to wallet holders was frequently problematic. Conventional methods, including personal delivery, registered mail, or online announcements, were often insufficient for reaching anonymous participants in cryptocurrency transactions.
Moses Park, representing the plaintiff in the Hong Kong lawsuit, acknowledged this challenge in a statement. He noted that “serving court orders to wallet holders has proven to be problematic, if not unfeasible, under the current procedural standards.”
In response, a new approach has been developed that employs a digital “police tape” to encircle funds obtained through illicit means, aiming to address this issue.
Nevertheless, this technology encounters obstacles. For example, by the time the tokenized court orders were applied to the Tron wallets involved in the Hong Kong case, a portion of the assets had already been moved to exchanges.
In summary, while the integration of blockchain technology into legal proceedings is still nascent, it presents opportunities for wider implementation. Macro Systems is actively testing this technology across various blockchain platforms, including Polygon and Ethereum, with plans for further expansion in 2025.
Although Hong Kong is at the forefront of utilizing tokenized legal notifications, other regions, such as the U.K. and the U.S., have also investigated the application of blockchain in legal matters.
The High Court in the U.K. has previously issued injunctions in cases involving NFT theft, recognizing NFTs as property and permitting legal documents to be served via airdropped NFTs.
In the U.S., the New York Supreme Court has similarly allowed legal documents to be served to anonymous defendants through NFTs.
Despite these advancements, experts warn that jurisdictional complexities and the absence of standardized protocols continue to hinder the widespread use of blockchain for legal notifications.
Laurenth Alba, a legal consultant at Rome Protocol, emphasized that enforcing legal actions against pseudonymous parties remains a considerable challenge.
