Wednesday, June 19, 2024
HomeNFTSingapore Court Empowers NFTs in Crypto Hack Case

Singapore Court Empowers NFTs in Crypto Hack Case

The Singapore High Court has issued a groundbreaking decision that allows financial investigation firm Intelligent Sanctuary (iSanctuary) to attach nonfungible tokens (NFTs) containing a legal document to cold wallets associated with a recent cryptocurrency hack. This unprecedented move has raised eyebrows in the world of blockchain technology and cryptocurrency.

The court issued a worldwide freeze order, which was tokenized as soulbound NFTs and connected to the wallets involved in the hack. While these NFTs do not prevent transactions with the wallets, they serve as a powerful warning to counterparties and exchanges, signaling their association with illicit activity. Moreover, iSanctuary claims to have developed a method to track funds leaving these wallets, thanks to the NFTs. Importantly, these NFTs will be permanently attached to the wallets.

iSanctuary, based in the United Kingdom, was commissioned by a businessperson who suffered a loss of $3 million in crypto assets due to the hack. The firm’s financial and crypto investigators presented a compelling case to the Singapore High Court, resulting in the issuance of the worldwide injunction – a first for the court. The investigators were able to identify a series of cold wallets holding the proceeds of the crime, and the court accepted their innovative use of NFTs in serving the legal order.

Mintable, a Singaporean NFT studio, played a pivotal role in the issuance of the NFTs. The NFTs were produced through Mintology, an app developed by Mintable, as indirectly confirmed by Zach Burks, the founder of Mintable.

The case, as reported by The Straits Times on October 17, is linked to the theft of a private key, with Singapore-based crypto exchanges allegedly involved in laundering the funds on behalf of fraudsters who posed as Singaporean actors. This complex case spans multiple countries, including Singapore, Spain, Ireland, Britain, and other European nations.

Jonathan Benton, the founder of iSanctuary, hailed this development as a “game changer” in the world of blockchain and cryptocurrency. The use of NFTs to attach legal documents to wallets involved in criminal activities provides a rapid and efficient means to police the blockchain, identify those holding illicit assets, and serve civil or criminal orders, ultimately raising red flags for those involved in unlawful transactions.

This landmark decision by the Singapore High Court sets a precedent for how legal authorities can leverage blockchain technology and NFTs to combat cryptocurrency-related crimes and enforce regulations on a global scale.

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