NFTs

Serving Process by Airdropping NFTs: The Next Frontier?

Critical to obtaining effective relief against a wrongdoing defendant is being able to serve process on that defendant in a manner that the forum hearing the dispute will deem sufficient, and that meets constitutional due process requirements for giving a defendant notice. Sometimes, though, this is easier said than done. This is especially so when litigating matters involving cryptocurrencies and other blockchain tokens. In such cases, the defendants being sued not infrequently operate only anonymously or pseudonymously, without ever disclosing their true names, physical addresses or even their general location—and that location might be anywhere in the world.

In two recent cases, one in New York and one in London, plaintiffs met this challenge head-on by pursuing an innovative service strategy: Process was served on the defendant by “airdropping” electronic copies of the papers into the defendant’s digital wallet, in the form of a “non-fungible token” or “NFT,” when the digital wallet was the only known point of contact for an unknown defendant. In each case the court gave its approval to this novel approach to service, notwithstanding the legal questions it potentially raised.

The New York Order

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