In D’Aloia v Persons Unknown [2022] EWHC 1723 (Ch), the High Court permitted service through a ‘non-fungible token’ (“NFT”) for the first time; this method of service involves the airdrop of documents into a cryptocurrency wallet. Service through an NFT can assist a claimant in circumstances where difficulties arise in identifying the physical address of a defendant at the outset of a claim. The judgment is examined in further detail below.

The judgment

The claimant made an application for interim injunctive relief, disclosure, and ancillary orders against a number of defendants, arising out of what the claimant alleged to be the fraudulent misappropriation of cryptocurrency. The claimant’s case was that he had been the victim of a scam to induce him to transfer cryptocurrency from his Coinbase and Crypto.com wallets to persons unknown, who were behind a fraudulent website which was created to imitate a well-known brokerage (the “Website”), in order to “con” unsuspecting investors.

The court granted permission for the claimant to serve the claim on the defendants outside the jurisdiction, then went on to consider the claimant’s application for service by an alternative method on the first defendant (‘persons unknown’, those behind the Website): (i) by email; and (ii) service using an NFT, which would involve the airdrop of documents into the cryptocurrency wallets to which the claimant transferred his cryptocurrency (as a result of the “scam”).

The court held there could be “no objection” to this method of service and that it would be “likely to lead to a greater prospect of those [behind the Website] being put on notice… of [the] order, and the commencement of … proceedings” (para 39). The court was satisfied that it was appropriate for service to be effected by NFT in addition to service by email.

As cryptocurrency exchanges and those behind such exchanges are often difficult to track down and may not have a fixed, physical address, this form of service provides a more practical option for those seeking to bring a claim. This case also signals the willingness of the courts to consider developments in technology in the context of cryptocurrency disputes.

However, in these types of fraud cases it is exceptionally rare for “persons unknown” to respond to or engage with civil proceedings, as doing so would require them put their head above the parapet and lose their anonymity. In cases where service of an order is required but a defendant is highly unlikely to respond in any event, the court is likely to be more willing to exercise its discretion to allow service by alternative means to ensure that there are no unnecessary barriers to enforcing the orders that it has made.