The English High Court has in D’Aloia v Persons Unknown and Others [2022] EWHC 1723 (Ch) (‘D’Aloia’) and Gary Jones v Persons Unknown and Huobi Global Ltd (Claim No. LM-2022-000125) (‘Gary Jones’) introduced airdropping a non-fungible token (‘NFT’) into a cryptocurrency wallet (‘wallet’) as a means of service of court documents. In this article, we shall summarise these aspects of the aforesaid cases.
 
D’Aloia
 
This case concerns a claim by Fabrizio D’Aloia (‘applicant’) against several persons unknown and others including Binance Holdings Limited (‘defendants’) for the recovery of approximately 2.1 million USDT and 230,000 USDC of cryptocurrencies which the applicant alleges had been fraudulently misappropriated from him by persons unknown behind a fraudulent website.
 
According to the applicant, he had been the victim of a scam whereby he had been induced on various occasions to transfer USDT and USDC from his Coinbase and Crypto.com wallets to two named wallets with tda-finan, a fraudulent website purporting to be associated with a legitimate US-regulated business. The applicant subsequently discovered that 2.175 million of USDT and USDC had been transferred to a number of private addresses and exchanges operated by, or under the control of, several of the defendants.
 
The applicant commenced proceedings against the defendants to recover his USDT and USDC and sought interim injunctive relief and disclosure and ancillary orders, including an order for service of notice of proceedings on the first defendant, who are persons unknown, by alternative means, first, by way of email; and second, by airdropping an NFT into the wallets to which the applicant had transferred his USTD and USDC, thereby embedding the service of the documents into the blockchain.
 
The learned judge acknowledged that service by airdropping an NFT is a novel method of service but accepted that this method is likely to lead to a greater prospect of those behind the tda-finan website being put on notice of the commencement of the proceedings and the making of the interim orders. Hence the court ordered the service of the documents to be effected on the first defendant by email and airdropping the NFT into the tda-finan wallets to which the applicant had transferred his USTD and USDC. 
 
D’Aloia is the first reported case where the English courts have ordered proceedings to be served by means of airdropping an NFT into a wallet. It should however be noted that on 2 June 2022, 22 days before the court granted the order for alternative service in D’Aloia, the Supreme Court of the State of New York in LCX AG v John Doe Nos. 1-25 (Index No.154644/2022) had issued an order allowing the plaintiff’s lawyers to serve court documents on persons unknown by NFT airdrop into a wallet.
 
Gary Jones
 
The claimant in this case, Gary Jones (‘claimant’) was encouraged to invest and trade in BTC (bitcoin) by persons who operated ExtickPro, a fake cryptocurrency trading platform. The claimant accumulated about 89 BTCs, with an approximate value of GBP 1.5 million, in his wallet with ExtickPro. 
 
Subsequently, the claimant’s requests to withdraw his BTCs were first met with numerous excuses and thereafter silence. The claimant’s BTCs were traced to a wallet operated by Huboi Global Ltd (‘Huboi’). Proceedings were then commenced by the claimant to recover his BTCs. Cause papers were initially served on persons unknown who operated ExtickPro and on Huboi by email. However, emails sent to ExtickPro were subsequently rejected when the website was taken offline.
 
The claimant then successfully obtained summary judgment and an order for the return of the claimant’s 89 BTCs. As it was no longer possible to serve the summary judgment order on the persons unknown by email, the claimant applied for, and successfully obtained, an order for the summary judgment to be served on the persons unknown and Huboi (in addition to service by email on the latter) by airdropping an NFT with an embedded link to a minute of the summary judgment order into the wallet with Huboi.
 
Gary Jones is noteworthy as it is the first instance where an NFT containing a final court order, i.e. the summary judgment, has been served by airdropping an NFT into a wallet. This case had a happy outcome for the claimant as Huboi returned the 89 BTCs to the claimant after the order had been granted by the court.
 
The position under Malaysian law
 
Having outlined the developments in this area in England, the question which we, as Malaysian lawyers, would ask is whether our Rules of Court 2012 (‘Rules of Court’) have the necessary provisions that will allow a Malaysian court to grant similar orders for substituted service by airdropping an NFT into a defendant’s wallet.
 
The Rules of Court contain two provisions relating to substituted service of court documents, namely Order 62 rule 5 (‘O.62 r.5’) and Order 62 rule 6 (‘O.62 r.6’).
 
O.62 r.5 provides, inter alia, that where it appears to the court that it is impracticable for any reason to serve on any person a document requiring personal service under the Rules of Court, the court may, upon application for substituted service supported by affidavit setting out the grounds on which the application is founded, make an order for substituted service of the document.
 
In relation to a document that is not required under the Rules of Court to be served personally, O.62 r.6 provides, inter alia, that the document may be served by various means, e.g. by prepaid registered post or facsimile, or ‘in such other manner as the court may direct.’
 
It can be seen from the above that O.62 r.5 and O.62 r.6 will enable a Malaysian court to make an order for substituted service of originating process (e.g. commencement of proceedings as in D’Aloia), and to direct any other document (e.g. a summary judgment order as in Gary Jones) by airdropping an NFT into a defendant’s wallet, if the plaintiff is able to satisfy the court that such method would be the most likely means of putting the defendant on notice as to the existence of the proceedings or the document. If the Malaysian court deems appropriate, it may order or direct service to be effected by airdropping an NFT together with a more conventional means of service, e.g. by registered post.
 
With the courts in United States and England having paved the way for service by NFT, it may be a matter of time before the Malaysian courts follow suit.
 
Article by Natalie Lim (Partner) of the Technology, Media and Telecommunications Practice and Karen Tan (Senior Associate) of the Dispute Resolution Practice of Skrine.