Key Takeaways
- A Brazilian court has granted permission to plaintiffs to serve subpoenas to unknown defendants in the bankruptcy lawsuit.
- BWA Brazil is accused of orchestrating one of the largest crypto frauds in Brazil.
- The use of NFTs for legal procedures has risen over the years despite the commercial market falling to all-time lows.
A Brazilian court has allowed the plaintiffs to serve Subpoenas using non-fungible tokens (NFTs) to unidentified defendants in a crypto bankruptcy case involving missing Bitcoins.
The crypto bankruptcy case is tied to the alleged pyramid scheme BWA Brazil, which used creditors’ funds to amass 11,200 BTC only to freeze withdrawals and declare bankruptcy.
Court Permits Use of NFT Subpoenas
According to a local report , the Brazilian court granted permission to the court-appointed trustee of BWA Brazil’s bankrupt estate to subpoena unidentified operators of BWA Brazil.
The estate has sought permission to mint NFTs containing the relevant legal documents and transfer them to wallet addresses involved in the initial transactions.
The court order read:
“Creditors who suffered multimillion-dollar losses cannot be further harmed by legislative delays in keeping up with technological innovation. Therefore, I authorize the court-appointed trustee to take all necessary actions to notify of this interruptive protest [which interrupts lawsuit deadlines] via electronic communication using NFTs.”
The BWA Brazil-led Bitcoin scam is considered one of the largest crypto heists in Brazilian history. It involved an alleged pyramid scheme that defrauded investors of 11,200 Bitcoins, valued at approximately $900 million.
The company operated as an alleged pyramid scheme, relying on a constant influx of new investors to pay returns to earlier ones.
This unsustainable model eventually collapsed when the flow of new funds dried up, forcing the firm to seize withdrawals in 2020 and declare bankruptcy soon after.
NFT Use in Litigation on the Rise
While the commercial use of NFTs has dwindled since its bull peak in 2021, its real-world use case continues to thrive, especially in the legal and judicial processes.
Using NFTs for legal procedures is nothing new and has seen an advanced use over the past few years. For example, In November 2022, the U.S. law firm The Crypto Lawyers was granted permission by the U.S. District Court for the Southern District of Florida to use NFT to serve a defendant.
In June 2022, an international legal company used NFT for a restraining order. The asset recovery team airdropped the NFT to the wallet address, and 1.3 million USDC were frozen on the chain in about one hour.
In the same month, a High Court judge granted the United Kingdom law firm Giambrone & Partners permission to use an NFT to serve document procedures, making it the first law firm in the U.K. and Europe to do so.
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