Hong Kong courts have begun serving legal notices directly on the blockchain to address the challenges of reaching anonymous cryptocurrency wallet holders involved in illicit activities.
A recent court injunction targeted two Tron wallet addresses suspected of being connected to an online scam, freezing approximately 2.65 million USDT in assets.
This method marks a first among major common law jurisdictions and could set a precedent for future cases involving digital assets.
Traditionally, serving legal documents required in-person delivery, registered mail, or email. However, these methods are ineffective when dealing with anonymous crypto wallet owners.
The case involves Worldwide A-Plus, a marketing consultancy that was defrauded of over US$2.6 million in Tether (USDT), a stablecoin pegged to the US dollar. Scammers, impersonating salespeople from a compromised online marketing platform, deceived the company into transferring the funds to two specific wallet addresses.
By issuing tokenized legal notices on the blockchain, the courts ensure that the notices are publicly recorded, making it difficult for recipients to claim ignorance.
This approach also deters centralized exchanges from engaging with these wallets due to their Anti-Money Laundering (AML) and Know Your Customer (KYC) obligations.
On December 5, High Court Deputy Judge Douglas Lam granted an injunction prohibiting the disposal of assets associated with these wallets both globally and within Hong Kong. Given the anonymity of the wallet holders, the law firm Ravenscroft & Schmierer served the order by creating a “tokenized legal notice.”
On January 17, public records retrieved from the blockchain scanning platform Tronscan showed that both wallets contained a token named ‘2-Jan25-Notice,’ transferred on January 3, with a message indicating that the initial court order remains in effect.
This innovative method addresses the difficulties of serving court documents to anonymous wallet holders, a challenge that has been “impossible under existing procedural requirements,” according to Moses Park, counsel for the plaintiff in the Hong Kong case.
Legal experts believe this innovative approach not only sets a significant precedent but also enhances Hong Kong’s position as a forward-thinking tech hub.