Crypto is often talked about as a bit of a Wild West.
But that's changing.
And it's changing because of decisions like one that's just happened in Singapore.
How safe do you feel when you use blockchain?
Safer than you might have done before?
Perhaps.
But the fact remains that when it comes to crypto, there are still some bad hombres out
there.
So who's protecting us?
Well, the exchanges are certainly trying to do something.
And when it comes to things like NFTs, the likes of Opensea have been making moves to
help consumers as well.
But the safety on offer from regulators and from legal systems has thus far been a little
bit more limited.
Until now, the High Court of Singapore has just made a huge decision and it could be
good news for people buying NFTs in particular.
It concerns a lawsuit filed there earlier this year over a allegedly stolen nonfungible
token.
A high net worth investor from Singapore essentially borrowed crypto from a lender known as Chef
Pierre.
That initial loan wasn't repaid by this investor, but a refinancing of the loan was seemingly
agreed to as part of that refinancing a Bored Ape Yacht Club NFT - Number 2162, was used
as collateral.
At the time, that was worth an estimated US$500,000.
Pretty cool.
Now, after the NFT was put into an escrow wallet, however, Chefpierre cleaned it and
moved it to a personal wallet.
Chefpierre then demanded the full amount of the original loan be repaid in just a matter
of hours.
Now, that all happened back in April and just a month afterwards, Singapore's High Court
put a proprietary injunction on the NFT as a result of this lawsuit that essentially
blocked any potential sale and transfer of ownership of the token.
Crucially, it said this was enforceable across the world, although as of recording, the NFT
still hasn't been returned to this original investor yet.
Some lawyers have called this move a landmark, however, and Forkast spoke with the lead counsel
in the case, Shaun Leong.
He said the decision would have global implications for blockchain and non-fungible tokens, in
particular.
For the very first time in a purely commercial dispute, we now have a court of law from from
a city which we would like to see as a global global city, as a global hub, which has a
significant decision, which sends a clear signal to NFT investors all over the world
that they have rights that can be protected, right?
So previously we have seen decisions, important decisions from other common law jurisdictions
which have a similar implication.
But those relate to criminal activity, those relate to fraudulent hacking.
And you have courts of law from different parts of the world to say, look, the law needs
to come in to give some form of protection.
But what's unique and interesting about Singapore's case is that it is a purely commercial dispute
between two parties claiming ownership over a exclusive bought block club NFT.
Others agree and say the legal protections that this decision now implies could be a
big boon for the sector.
Hong Qi Yu, the chief executive officer of Tokenize Exchange, said that now bigger players
would begin to look into NFT technology much more seriously.
Not everyone agrees about the significance, though.
Australian lawyer Michael Bacina questioned the strength of the precedent, telling Forkast
both sides hadn't had the opportunity to make submissions about the status of the crypto
assets.
Like many other jurisdictions, Australian courts are also wrestling with multiple cases
regarding similar sorts of disputes as this.
Now Bacina said that this move could yet though inform other court decisions on the matter
and Long said regardless, Singapore now had sent a clear message not to the courts but
to the industry.
I think on a broader scale, it also sends a picture.
It sends a message to the world of blockchain that while people value their anonymity, while
people cherish their privacy at the same time they are private rights, they are property
rights can be protected or parties can indeed seek private recourse or private remedies
to a court of law, notwithstanding the fact that, you know, at first instance, it may
not necessarily be a straightforward exercise to understand which court do I go to, where
do I seek recourse?
Because the digital asset is cited in the blockchain, and the blockchain is technically
very international in nature, given that it's borderless and it's decentralized.
There's one other potential landmark move in all of this as well.
The court in Singapore allowed papers to be served to the defendant via the blockchain.
Leong said he tried messaging functions on Ethereum, the online chat platform popular
with Web3 projects.
He'd also tried Discord and Twitter, where Chefpierre has a seemingly sizable following.
Ultimately, he had to turn elsewhere as well.
We are seeing how uniquely and in very interesting ways the law is catching up with the technology,
so to speak.
And and I think this is great for the metaverse, because what it means is that, you know, while
the spirit of decentralization remains a core foundation for innovation that is supplemented
by the fact that courts of law around the world would see the need to come in as appropriate
to help bring some order to the space as and when needed.
You see, so and I think having that that order, having that rule of law would actually be
a great foundation for credible innovations to continue to thrive in the metaverse part
of this crypto winter because.
If anything, the current crypto winter has taught us quite a few hot lessons, you know,
and almost like a natural evolutionary process where the bad eggs are revealed.
You know, in this current crypto winter and hopefully get the necessary recourse under
the law as they deserve.
But, but I think moving forward, that is with the foundation set by the rule of law, I think
that's only going to help support innovations to come in the metaverse.
Now, the Singapore High Court ultimately found that NFTs aren't just information or code
on the blockchain.
They have the attributes of property and therefore they give the owner the same sort of rights.
It comes as regulators, not just courts, are wrestling with the potential implications
of all of this, and it's a key consideration for the UK's Law Commission right now.
It's just released a consultation paper in July that proposed establishing a new category
of property rights to cover digital assets like NFTs.
That closes on November the fourth.
It will likely prompt further reaction.
But will it make you more confident about buying NFTs then?
Does all of this make crypto less of a Wild West?
Let us know what you think about all of this in the comments below.
And finally, just a quick reminder that Forkast latest crypto Rising livestream event is coming
next month.
It happens 9 p.m. Eastern November 14th, 9 a.m.
Hong Kong Time.
November the 15th.
Forkast's Editor in Chief Angie Lau will be leading the conversation into why some investors
and VCs are betting big on digital assets start ups despite the crypto winter.
Make sure you sign up at Forkast.News or click the link down below in the description.
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