Metamask Co-founder Criticizes Airdropping Legal Summons to Crypto Addresses 

Meramask co-founder David Finlay has criticized a new use case for non-fungible tokens (NFTs) which saw the airdrop of an NFT Service Token to the wallet address of the defendant.

‘A Terrible Precedent’

In a tweet thread on Monday (June 13, 2022), Finlay said that airdropping legal summons to crypto addresses is a terrible precedent. Finlay’s comments are in response to an ongoing civil case where one of the respondents was served a restraining order via an airdropped NFT. 

Earlier in June, Holland & Knight and Bluestone, lawyers representing cryptocurrency exchange LCX, served a temporary restraining order via an NFT service token to the defendant’s wallet address. 

LCX suffered a hack in January 2022 that led to the loss of nearly $8 million worth of cryptocurrencies from one of the platform’s hot wallets. Since the incident, the crypto exchange has been working with law enforcement agencies in various countries to track the stolen funds and identify the hacker. 

According to LCX the method employes by the exchange’s lawyers was approved by the New York Supreme Court. 

Commenting on the development, Finlay said:

“This is a terrible precedent. This will fail to scale quickly (how many chains are you legally obligated to watch?), and would imply users must legally subject themselves to any amount of airdrop harassment if they have a public address, just to be available to the court.”

Furthermore, the Metamask co-founder said that the system can be abused, saying “if being unaware of an NFT is an admission of guilt, start airdropping anyone with dubious slapsuits as NFTs. Maybe start with this judge, if they have a public address. Do it on a less popular chain.”

Such abuses are not uncommon in the crypto space where hackers have even been known to send some of their loot to well known addresses. As Finlay, such an established precedent could cause significant issues down the line especially as chain notification services that alert a user to messages delivered on-chain have yet to take off.

Concerning Litigation and Crypto’s ‘Anon’ Culture

Privacy and anonymity are among crypto’s core ethos and while this might work in the area of censorship resistance, it can bring up issues in the realm of civil litigation and criminal proceedings. With the industry’s continued rise in prominence, the court system might be next in line to figure out a way to deal with the peculiarities of the cryptocurrency space.

Singapore’s High Court recently blocked the sale of a Bored Ape Yacht Club NFT due to an ongoing case between two individuals. One of the individuals, the defendant in this case, is a pseudonymous NFT collector called “chefpierre.” 

NFT marketplace giant OpenSea blocked the sale of the NFT in question. It is not, however, clear if the action was taken due to the court ruling in Singapore.

The case of Hodlnaut and Craig Wright, the self-proclaimed Bitcoin creator is perhaps the best example of a legal proceeding involving an anonymous crypto character. This libel case even included attempts to doxx the pseudonymous Hodlnaut.