A guide to Non-Fungible Tokens (NFTs), 2023 - Flipbook - Page 38
This is likely to draw on a range of factors, which may include:
•
The domicile of the defendant: given the nature of blockchain transactions,
the identity of the defendant will often be unclear on the basis of solely
their pseudonym. In many cases, the defendant’s identity may not be clear
when the court is considering whether to grant permission to serve the
claim form outside the jurisdiction. This was a factor in the recent case
of Osbourne -v Persons Unknown [2022] EWHC 1021 (Comm), which
concerned an application made by Ms Osbourne in relation to a fraudster
removing NFTs from her wallet without her knowledge or consent. When
considering whether proceedings could be served on persons unknown out
of the jurisdiction (to the extent that the persons unknown were out of the
jurisdiction), His Honour Judge Pelling QC held that in all the circumstances
England was the most appropriate forum: “I have no information as to
where the persons unknown are located, or the jurisdictions in which they
are to be found. On the other hand, what I do know is that the claimant
is located in England and English law treats the assets as having been
removed from her in England. In those circumstances, on balance, and
at this stage in the enquiry, I am satisfied that England is the appropriate
forum. I am satisfied in those circumstances that permission should
be granted to serve the persons unknown out of the jurisdiction.”
This approach followed that taken by Mr Justice Butcher in the earlier
case of Ion Sciences Ltd v Persons Unknown and others (unreported), 21
December 2020 (Commercial Court). Butcher J. See further at Legal update,
Commercial Court grants interim injunctions against persons unknown
and Bankers Trust order against cryptocurrency exchanges in ICO fraud.
The identity of the parties and especially the defendant, may be further
complicated in instances of fraud or counterfeit, where a minter of an NFT
may be sued by a person claiming rights to that NFT.
•
The domicile of the owner of the NFT: In Ion Sciences Ltd v Persons
Unknown and others, Butcher J held that the lex situs of a crypto asset
is the place where the person or company who owns it is domiciled. For
further discussion of the concept of domicile in this context, see Practice
note, Transfer of digital assets on death: Specific issues relating to
cryptocurrency.
