This marks the first time when a TRO was served to a hacker by NFT.
On June 7, an American multinational law corporation Holland & Knight, and a third-generation law firm dubbed Bluestone announced that they have served a defendant a “service NFT.” The hacker has reportedly been issued a restraining order.
Holland & Knight has become the first law firm to serve a defendant by #NFT, which was created and airdropped by our #AssetRecovery Team. Learn more from our client @LCX. https://t.co/wWs2cOVVY1 #crypto #blockchain #legalinnovation pic.twitter.com/mo7VaAKEgo
— Holland & Knight (@Holland_Knight) June 8, 2022
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The case relates to a hacking incident that took place earlier this year. On January 9th, Liechtenstein-based exchange LCX released an official statement reporting that one of its hot wallets was hacked and the firm lost around $7.94 million worth of digital assets.
ℹ️ Service Notice: We noticed a security incidence at our platform. We are currently investigating and will provide regular updates. User funds are safe!
In the meantime deposits and withdrawals have been suspended.
— LCX (@lcx) January 9, 2022
Since the incident, LXC has been strongly keen on recovering all their stolen funds and tracing back the person responsible for the hack. To do so, the legal team of the exchange joined forces with law enforcement and blockchain tracing specialists.
Earlier in June, LXC released a report indicating that around 60% of the stolen funds are currently frozen, whereas 500 Ethereum (ETH) are also frozen “due to a Liechtenstein court order served by law enforcement in Ireland to Coinbase Europe“. On top of that, the crypto exchange implied that investigations will be conducted in Ireland, the USA, Spain, and Liechtenstein.
On top of that, the stolen funds were initially stolen via Tornado Cash, a crypto mixer protocol for concealing the digital trail of blockchain transactions. However, LXC managed to trace the exact location of the stolen funds and the wallets through “algorithmic forensic analysis.”
In fact, this is the first time in history when a temporary restraining order (TRO) was served to a defendant through a non-fungible token (NFT), also dubbed a “service token” or “service NFT.” LCX commented on such a method:
“This innovative method of serving an anonymous defendant was approved by the New York Supreme Court and is an example of how innovation can provide legitimacy and transparency to a market that some believe is ungovernable.”
In other news, back in April, the Department of Justice (DoJ) managed to secure a “civil forfeiture complaint”, seizing around $34 million in cryptocurrencies. According to the official report, the person responsible for the hack was supposedly involved in more than 100K sales of various illegal items and services.