Florida court allows service of lawsuit upon foreign crypto scammers by NFT

In what appears to be a growing trend of courts both abroad and in the US, the US District Court for the Southern District of Florida has authorized service of a lawsuit seeking the recovery of stolen digital assets by way of a non-fungible token or NFT containing the text of the complaint and Summons and a hyperlink to a website created by Plaintiffs containing all pleadings and orders in the action.

The plaintiffs sent the NFT and website links to cryptocurrency wallets maintained by the defendants. The crypto thieves are alleged to be Chinese nationals, and the court justified this form of alternative service under the Federal Rules of Civil Procedure 4(f)(3) and the Hague Convention on Service Abroad on the basis that the defendants “conducted their alleged scheme using electronic means over the Internet and using cryptocurrency blockchain ledger technology. Plaintiff shows that NFT and website posting are likely to reach Defendants.”

The court further noted that service by NFT transfer and by posting on a designated website is not prohibited under international agreement, and China has not specifically objected to such means.

This latest decision authorizing airdropped NFT service joins at least one other US court in New York in addition to recent UK and Italian court decisions allowing the same means. The use of airdropped NFT service also joins other means of alternative service of process to be achieved for internet defendants. In September, the CFTC was reportedly permitted to post the complaint to an online discussion forum for DAO members to effect service of process on the Ooki DAO.