The UK High Court has recognised NFTs as “legal property” in a landmark case. This will likely have a large impact on the disputes concerning digital art.
The case was filed in March this year by the founder of Women in Blockchain Talks, Lavinia Osbourne. She claims that two NFTs from the Boss Beauties collection which were designed to “create opportunities” and raise funds for females were stolen from her online wallet.
In a judgement, which will be published in the near future, the judge appointed for the case held that the digital assets were “property” and hence able to have access to legal protections.
In this instance, an injunction served on accounts on Ozone Networks (hosts of the OpenSea), to freeze the assets, and a Bankers Trust disclosure “compelling [OpenSea] to send information about the two account holders” who currently have hold of the NFTs.
An additional permission to serve the orders, regardless of jurisdiction, is also noteworthy for cases involving digital art, considering that the physical location of those involved is mostly unknown.
“It is of the utmost significance as, for the first time in the world, a court of law has recognised that an NFT is property capable of being frozen by way of an injunction. This ruling, therefore, removes any uncertainty that NFTs (as tokens consisting of code) are property in and of themselves, distinct from the thing they represent (e.g., a digital artwork), under the law of England and Wales” says Racheal Muldoon, a counsel on the case, from 36 Commercial law group.
OpenSea has currently blocked the sale of the NFTs on the platform.
Mitmark, an intelligence firm based in the UK, was called in to gather proof for the case and is continuing to support attempts to identify the current holders of the tokens and smooth the way for their return.
“Hacks and theft are increasingly a common problem for NFT holders. Now that the courts have recognised that NFTs are property, holders can rest assured that they will be supported and have recourse in this jurisdiction” Muldoon said.
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