Plaintiff Wins Case Against Hackers After Serving Court Papers via NFT - Decrypt
Plaintiff Wins Case Against Hackers After Serving Court Papers via NFT
The court demanded that hackers return nearly $1 million worth of stolen USDT—but how the money will be recovered is unclear.
Sander Lutz
By Sander Lutz
Mar 15, 2023
3 min read
Image: Shutterstock
Image: Shutterstock
A federal judge in Florida has ruled in favor of a plaintiff who sued anonymous hackers and issued formal notice of the legal action via NFT, according to recent court filings.
The ruling, a default judgment from Judge Beth Bloom of the United States District Court Southern District of Florida, declares that the unidentified hackers are on the hook for the $971,291 worth of USDT (Tether) that they stole from plaintiff Rangan Bandyopadhyay’s Coinbase wallet in December 2021.
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The perpetrators have been ordered to pay the equivalent amount back to Bandyopadhyay, with the amount set to accrue interest on that debt until it is paid in full.
Because of the blockchain, it remains unclear who these digital thieves were, let alone where they reside. That’s why Judge Bloom permitted them to be served via NFT in last week’s case, using the same on-chain addresses they used to steal from Bandyopadhyay.
The scales of justice. Image: Tingey Law Firm on Unsplash.
Ethereum
See You in Court, Anon: UK Judge Allows Lawsuits via NFT Airdrop
Don’t know who stole your crypto? If you’re in the U.K., you can now sue them through a blockchain. A U.K. court last month granted the firm Giambrone & Partners LLP permission to serve legal proceedings to an anonymous individual via an NFT airdrop sent to the individual's crypto wallet, the firm reported Tuesday. Fabrizio D’Aloia, who is represented by Giambrone, is suing an unknown person—as well as the crypto exchanges Binance, Poloniex, gate.io, OKA, and Bitkub—over a loss of crypto funds. ...
News
NFTs
2 min read
Kate Irwin
Jul 14, 2022
The hackers tricked the plaintiff into linking his Coinbase wallet to a fake liquidity mining project, and then drained money from that wallet to their own. After several transfers, the funds ended up in a Binance Exchange Pool.
Judge Bloom’s determination that NFTs constituted a legitimate form of legal notification for these defendants marks the first time an American federal court has allowed defendants to be served by NFT.
Prior to last week’s ruling, a New York county court permitted the practice early last year. Last summer, a U.K. court ruled that NFTs are an acceptable method of notifying anonymous, on-chain defendants in that country.
The trend marks a turning point for legal systems that are desperately trying to catch up with a slew of new types of crime facilitated by blockchain technology. Crypto-savvy hackers routinely create elaborate networks of fake companies to persuade unsuspecting victims to link their wallets, which are drained shortly thereafter. In an ecosystem where even high-profile, legitimate actors routinely operate anonymously, it can be hard to discern the legitimate from the dubious.
It is even harder to get digital funds and assets back once they’re stolen.
Governments Have Been Seizing Stolen Bitcoin and Ethereum. How?
Illicit, sanctioned, or stolen cryptocurrency has been making headlines, with Bitfinex-related charges against Heather Morgan and her husband, Ilya Lichtenstein, and the anti-vaccine protests in Canada serving as two recent examples. But with so many Bitcoin proponents describing the flagship cryptocurrency as “resistance money”—a form of currency that can't be censored by governments or law enforcement—it begs the question: How is ill-gotten Bitcoin actually recovered? The short answer is, ther...
News
Coins
5 min read
Scott Chipolina
Feb 27, 2022
But, according to Fernando Bobadilla—the attorney who successfully represented Bandyopadhyay in last week’s case—the blockchain can be just as problematic for hackers as it so often is for their victims.
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“These fraudsters are usually outfits outside of the United States, and everything that they tell the victim is a lie about their own identity,” Bobadilla told Decrypt. “But what they can't hide is the transfer of the funds via the blockchain. The ledger is there and they can't hide.”
The attorney is confident that he and his client are well on the way to recovering at least a portion of the stolen funds—though he wouldn’t elaborate on how that might be possible.
“Us knowing where the crypto is sitting makes the entire collection strategy viable,” is all he would say.
American-based crypto companies like Circle, which issues stablecoin USDC, and Coinbase, the centralized crypto exchange, have previously frozen funds or accounts at the behest of the American government. USDT, the cryptocurrency stolen from Bandyopadhyay’s wallet, however, is issued by Tether, a Hong Kong-based company; Binance, where those funds were purportedly deposited last year, has also previously frozen stolen funds transferred to its accounts, though the company has also famously avoided clarifying its home country.
The court demanded that hackers return nearly $1 million worth of stolen USDT—but how the money will be recovered is unclear.
Sander Lutz
By Sander Lutz
Mar 15, 2023
3 min read
Image: Shutterstock
Image: Shutterstock
A federal judge in Florida has ruled in favor of a plaintiff who sued anonymous hackers and issued formal notice of the legal action via NFT, according to recent court filings.
The ruling, a default judgment from Judge Beth Bloom of the United States District Court Southern District of Florida, declares that the unidentified hackers are on the hook for the $971,291 worth of USDT (Tether) that they stole from plaintiff Rangan Bandyopadhyay’s Coinbase wallet in December 2021.
AD
The perpetrators have been ordered to pay the equivalent amount back to Bandyopadhyay, with the amount set to accrue interest on that debt until it is paid in full.
Because of the blockchain, it remains unclear who these digital thieves were, let alone where they reside. That’s why Judge Bloom permitted them to be served via NFT in last week’s case, using the same on-chain addresses they used to steal from Bandyopadhyay.
The scales of justice. Image: Tingey Law Firm on Unsplash.
Ethereum
See You in Court, Anon: UK Judge Allows Lawsuits via NFT Airdrop
Don’t know who stole your crypto? If you’re in the U.K., you can now sue them through a blockchain. A U.K. court last month granted the firm Giambrone & Partners LLP permission to serve legal proceedings to an anonymous individual via an NFT airdrop sent to the individual's crypto wallet, the firm reported Tuesday. Fabrizio D’Aloia, who is represented by Giambrone, is suing an unknown person—as well as the crypto exchanges Binance, Poloniex, gate.io, OKA, and Bitkub—over a loss of crypto funds. ...
News
NFTs
2 min read
Kate Irwin
Jul 14, 2022
The hackers tricked the plaintiff into linking his Coinbase wallet to a fake liquidity mining project, and then drained money from that wallet to their own. After several transfers, the funds ended up in a Binance Exchange Pool.
Judge Bloom’s determination that NFTs constituted a legitimate form of legal notification for these defendants marks the first time an American federal court has allowed defendants to be served by NFT.
Prior to last week’s ruling, a New York county court permitted the practice early last year. Last summer, a U.K. court ruled that NFTs are an acceptable method of notifying anonymous, on-chain defendants in that country.
The trend marks a turning point for legal systems that are desperately trying to catch up with a slew of new types of crime facilitated by blockchain technology. Crypto-savvy hackers routinely create elaborate networks of fake companies to persuade unsuspecting victims to link their wallets, which are drained shortly thereafter. In an ecosystem where even high-profile, legitimate actors routinely operate anonymously, it can be hard to discern the legitimate from the dubious.
It is even harder to get digital funds and assets back once they’re stolen.
Governments Have Been Seizing Stolen Bitcoin and Ethereum. How?
Illicit, sanctioned, or stolen cryptocurrency has been making headlines, with Bitfinex-related charges against Heather Morgan and her husband, Ilya Lichtenstein, and the anti-vaccine protests in Canada serving as two recent examples. But with so many Bitcoin proponents describing the flagship cryptocurrency as “resistance money”—a form of currency that can't be censored by governments or law enforcement—it begs the question: How is ill-gotten Bitcoin actually recovered? The short answer is, ther...
News
Coins
5 min read
Scott Chipolina
Feb 27, 2022
But, according to Fernando Bobadilla—the attorney who successfully represented Bandyopadhyay in last week’s case—the blockchain can be just as problematic for hackers as it so often is for their victims.
AD
“These fraudsters are usually outfits outside of the United States, and everything that they tell the victim is a lie about their own identity,” Bobadilla told Decrypt. “But what they can't hide is the transfer of the funds via the blockchain. The ledger is there and they can't hide.”
The attorney is confident that he and his client are well on the way to recovering at least a portion of the stolen funds—though he wouldn’t elaborate on how that might be possible.
“Us knowing where the crypto is sitting makes the entire collection strategy viable,” is all he would say.
American-based crypto companies like Circle, which issues stablecoin USDC, and Coinbase, the centralized crypto exchange, have previously frozen funds or accounts at the behest of the American government. USDT, the cryptocurrency stolen from Bandyopadhyay’s wallet, however, is issued by Tether, a Hong Kong-based company; Binance, where those funds were purportedly deposited last year, has also previously frozen stolen funds transferred to its accounts, though the company has also famously avoided clarifying its home country.
