May 5, 2022
The United Kingdom’s High Court has reportedly recognised non-fungible tokens (NFTs) as “property” in a landmark case. This means that victims of NFT theft now potentially have access to legal remedies typically associated with more traditional forms of property, such as asset freezing court injunctions, amongst other things. While the UK Jurisdiction Taskforce previously acknowledged cryptocurrencies as property, this is the first time that NFTs have been recognised in the same way.
The case was originally filed in March 2021 by the founder of Women in Blockchain Talks, Lavinia Osbourne, who claimed that two NFTs had been stolen from their online wallet.
The remedies sought (both of which appear to have been granted) were: (a) an injunction on accounts on Ozone Networks (which hosts the NFT marketplace OpenSea), to freeze the NFTs, and (b) a Bankers Trust disclosure “compelling [OpenSea] to send information about the two account holders” who currently hold the reportedly stolen NFTs. An additional permission to serve the orders regardless of jurisdiction was also granted, which is noteworthy considering the physical location of those involved in NFT theft is often unknown.
The judgment follows several other recent high-profile NFT thefts. In one recent instance a hacker compromised the official Bored Ape Yacht Club (BAYC) Instagram account to post a phishing link that that enabled the theft of dozens of NFTs worth around $3 million.
BAYC also recently launched its ‘Otherside’ metaverse, a multiplayer gaming environment connected to the BAYC ecosystem which raised around $285 million by selling NFTs that act as deeds to 66,000 digital plots of land in The Otherside.
Use cases such as these show how valuable NFTs can be, and recognition as legal property will come as welcome news to owners. The full judgment is due to be published later this week.