Bristows’ SnippITs - How alternative: Court approves service by NFT only

This post is part of the Bristows’ SnippITs series, which pulls together the key practical takeaways from recent court decisions for the tech sector and beyond.

Non-Fungible Tokens or NFTs seem to be the latest innovation for creating unique pieces of art. But in Osbourne v Persons Unknown Category A [2023] EWHC 39 (KB), the High Court scrutinised the procedural gateways for service out of the jurisdiction and, for the first time by a Court in England and Wales, approved service by NFT (as an alternative means and as the sole method of service of pleadings).  

Why is this significant?

• Although service by NFT was previously approved in D’Aloia v Persons Unknown [2022] EWHC 1723 (Ch) and Jones v Persons Unknown [2022] EWHC 2543 (Comm), this is understood to be the first time that a Court in England and Wales has authorised service by NFT as the sole method of service.
• The English Courts appear to be increasingly willing to authorise service by NFT where the locations and identities of defendants in crypto-fraud cases cannot be established.  As this becomes more commonplace, it will be interesting to see whether service by NFT becomes an accepted alternative means for service even where the defendant’s personal details are known.

Background

On 17 January 2022, Lavinia Osbourne (a Blockchain consultant) had two “Boss Beauties” NFTs removed from her crypto-wallet without her knowledge or consent by unidentified persons. The two NFTs, which depicted digital artworks of inspirational women, were valued between £3,000 and £5,000. An investigator retained by Ms Osbourne discovered that the NFTs had been transferred to accounts on crypto-wallets on Opensea, an NFT marketplace.

Last year, HHJ Pelling KC granted an injunction restraining the unidentified hackers from dealing with or disposing of the NFTs.

The present case

Following further transfers (and an auction) of one of the NFTs, Ms Osbourne requested that the injunction be extended to cover additional suspected hackers. Ms Osbourne also requested, among other things, permission to serve court documents out of the jurisdiction and by alternative means, including by NFT.

The decision

On the basis that there was no other available method of service on the defendants of the pleadings and supporting documents, the Judge authorised service of these documents by NFT.

Further, as service by NFT would be open to public eyes, the Judge ordered that the documents and embedded hyperlinks be redacted to prevent access to any party’s personal data. This was on condition that the defendants be offered unredacted versions of the documents and that the redactions be pre-approved by the Court.