A guide to Non-Fungible Tokens (NFTs), 2023 - Flipbook - Page 41
Enforcement
Following a successful claim, and even in advance of any claim
being made, it is important to consider how any judgment, order or
injunction can be enforced against the NFT and asset in question.
Key issues will include:
•
Identity of the defendant: due to the pseudonymous nature of the
blockchain, the identity of the defendant may be unclear. In this instance,
the claimant can apply for an order requiring the associated platform or
blockchain provider to disclose documents, or information, in order to
establish the identity of the defendant.
•
This may be possible through an application for:
1. A Norwich Pharmacal order. For more on Norwich Pharmacal
orders.
2. A Bankers Trust order (granted in Osbourne v Persons Unknown
and in Ion Sciences Ltd v Persons Unknown and others). For more on
Bankers Trust orders.
•
Seizure of assets: while some judgments will relate purely to a monetary
claim, many will require appropriation of the NFT itself, or the underlying
asset. With regard to judgments made in relation to NFTs, it is likely that
any order will deal with prevention of transfer of the NFT. If the smart
contract provides for suspension of its code in specified circumstances,
it is probable that an order for specific performance or injunction might
apply to this. In an instance where the smart contract does not provide
for suspension of the code, or where the NFT has been transferred on by
the defendant, the position is less clear. In terms of gaining control of the
NFT, the crux of this will lie with access to the private key of the defendant,
which may not be simple to secure. Furthermore, when considering the
underlying asset, the court may have limited powers in the protection
of this, depending on how and where it is stored (see Control and
ownership).
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