An injunction order prohibiting the transfer of funds from two crypto wallets linked to fraud has been served through blockchain in Hong Kong. In a move many believe sets a precedent, the court allowed the plaintiff’s lawyers to serve a tokenized legal notice. According to local reports, the case involved a fraud claim by marketing consultancy firm Worldwide A-Plus against two Tron wallets. The firm claimed to have been misled into transferring $2.6 million in Tether USDT to the two Tron wallets by scammers and sought a court order to freeze the assets. Penal notice to two Tron wallets implicated in fraudulent activities in Hong Kong. (Source: High Court of Hong Kong) Hong Kong precedent consolidates pro-crypto approach High Court Deputy Judge Douglas Lam granted the injunction order against the holders of the two wallets in early December, preventing them from disposing of the assets in Hong Kong and worldwide. However, the major challenge was how to serve the order to the anonymous holders. Ravenscroft & Schmierer, the law firm representing the victim, got the court’s approval to serve the order by tokenizing it and sending it to the wallets. Data from Tronscan shows that the two wallets contain a token named 2-Jan25-Notice. The message in the token states: “Please refer to the hyperlink in our previous legal notice dated December 9 2024 for a copy of the relevant court order and the plaintiff’s statement of costs, which has now been served on you, by way of Tokenised Legal Notice.” The order from the High Court of the Hong Kong Special Administrative Region also names the holders of wallet addresses TNQDWp and TASg72Y as defendants in the lawsuit. It states that failure to comply with the injunction order amounts to contempt of court. Meanwhile, many legal professionals believe that the move shows how the traditional legal system is adapting to blockchain technology and sets a precedent for tokenized legal notices in this city. They believe this further makes Hong Kong an attractive place for crypto businesses. Regulatory clarity in the US could be bad news for Hong Kong Over the past few years, the city has seen significant regulatory clarity around crypto and blockchain innovation, leading to the licensing of crypto exchanges, the introduction of a stablecoin bill, and the pilot phase for the electronic Hong Kong Dollar (e-HKD). However, some stakeholders believe that Hong Kong could become less attractive for crypto businesses now that the US is changing its approach to the industry. Still, it is not clear whether serving tokenized legal notices is effective for freezing assets. While it ensures that the party involved cannot claim to be ignorant of the legal order, it does not prevent bad actors from moving stolen funds. In the current case, the scammers have already moved more than 50% of the funds despite the service of the tokenized notice. However, Tronscan data shows the addresses still hold around $1 million in USDT. Beyond that, many users have criticized the idea of serving crypto users on-chain. One user on X said that it might soon be impossible to make money on-chain with the authorities actively pushing to regulate the crypto industry. Interestingly, this is not the first time that a court has served legal notices on wallet holders through tokenized means. In 2022, the UK High Court allowed the service of legal documents through a non-fungible token (NFT) sent to defendants’ addresses. Cryptopolitan Academy: FREE Web3 Resume Cheat Sheet - a href="https://www.cryptopolitan.com/ultimate-web3-resume-cheatsheet?utm_source=cryptopolitan&utm_medium=banner&utm_campaign=web3cs-1" target="_blank">Download Now
