By Our Correspondent
A court in Hong Kong has successfully implemented an order related to a fraud case, resulting in the effective suspension of the involved assets after they were transferred to two cryptocurrency wallets utilizing tokenisation technology, according to The South China Morning Post.
This innovative method is anticipated by experts to establish a precedent for other jurisdictions and enhance Hong Kong’s status as a technology hub, as reported by various media outlets. The injunction prohibits the disposal of assets both globally and within Hong Kong and was directed at the unidentified holders of two wallet addresses on the Tron blockchain.
This action follows a fraudulent scheme that led a Hong Kong company to lose over US$2.6 million due to false representations. The plaintiff in this civil case is Worldwide A-Plus, a marketing consultancy that transferred US$2.66 million in Tether, a stablecoin linked to the US dollar, to wallets controlled by scammers posing as representatives from a compromised online marketing platform.
The order, which identifies the unknown wallet holders as defendants, was issued by High Court Deputy Judge Douglas Lam on December 5 and was subsequently delivered by the law firm Ravenscroft & Schmierer as a “tokenised legal notice.”
Public records accessed via the blockchain scanner Tronscan on January 17 reveal that both wallets hold a token labeled “2-Jan25-Notice,” which was transferred on January 3 and included a message affirming the ongoing validity of the initial court order.
The message stated, “Please refer to the hyperlink in our previous legal notice dated Dec 9 2024 for a copy of the relevant court order and the plaintiff’s statement of costs, which has now been served on you, by way of Tokenised Legal Notice.” Additionally, records indicate that one wallet retained approximately US$1 million in Tether two weeks after the legal notice was issued, while the other wallet contained only US$1.28.
Joshua Chu Kiu-wah, a technology attorney serving as a cybersecurity consultant for the blockchain solution provider Macro Systems in this matter, informed the Post that the order had been “successfully executed” and that the “assets in question are effectively suspended,” with operational specifics remaining confidential.
He noted that while the wallets continued to operate, the token functioned as a “police cordon tape,” enabling compliant cryptocurrency exchanges and law enforcement agencies to identify illicit wallets and take appropriate action.
“What we implemented this time is akin to a tape, but in a digital format. We issued a notice indicating that this account contains money-laundering assets. Even if it is not frozen, anyone engaging in transactions from the [address] will be considered an accomplice as per the notice,” Chu explained.
Chu expressed his belief that this marked the first instance in major common law jurisdictions where a court order was effectively executed through tokenization.
While courts in the United Kingdom have previously utilized non-fungible tokens (NFTs) to serve orders, Chu asserted that NFTs were not as effective as the Tron token employed in this case.
The attorney emphasized that Hong Kong had not only established a precedent for other jurisdictions but that the technological expertise of local solution providers could also attract global business opportunities.