Recently, a federal judge in Florida, United States gave out a judgment in favor of the complainant who sued anonymous hackers and issued a formal notice of the legal action via a non-fungible token (NFT).
Sources reveal that Judge Beth Bloom of the United States District Court Southern District of Florida ruled out a default judgment that declares that the unidentified hackers are found guilty of the $971,291 worth of USDT (Tether) that they stole from plaintiff Rangan Bandyopadhyay’s Coinbase wallet in December 2021.
The judge ruled that the perpetrators have to pay the equivalent amount back to the complainant, along with the amount of estimated interest on that debt until it is paid in full. Since the incident occurred on the blockchain, the identity of these thieves remains unclear, let alone where they reside.
Hence, judge Bloom permitted them to be served via NFT using the same on-chain addresses that they used to steal from the complainant. According to the sources, the hackers tricked the plaintiff into linking his wallet to a fake liquidity mining project and then transferred money from that wallet to their own.
It is important to note that Judge Bloom’s decision that NFTs constituted a legitimate form of legal notification for these defendants marks a historic move. It is for the first time a federal court in the US has allowed defendants to be served by NFT.
This step also 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 have started to create elaborate networks of fake agencies to attract unsuspecting individuals to link their wallets, which are emptied eventually.
Given the nature of the crypto ecosystem where even high-profile, legitimate actors routinely operate anonymously, it can be really difficult to differentiate the legitimate from the dubious. Unfortunately, in such cases, it is even more difficult to retrieve digital funds and assets once they’re stolen.
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.” He added:
These fraudsters are usually outfits outside of the United States, and everything that they tell the victim is a lie about their own identity 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 looked optimistic about the funds stolen and was sure that they are on the way to recovering at least a portion of the stolen funds but he did not want to elaborate on how that might be possible. He added that all he could say is that “us knowing where the crypto is sitting makes the entire collection strategy viable.”
In recent years, the crimes in crypto have put regulators and investors in significant fear of losing their savings. As per a report, the crypto industry lost $3.9 billion in the previous year. Amongst these losses, hacks were found to be the main causes, accounting for 95.6% of the total, and the rest, 4.4%, comprising fraud, scams, and rug pulls.
Cybercriminals seemed to have sought new and sophisticated ways of committing crimes and would not step back anytime soon until the regulators send out a strong message. In this context, the judgment from the Florida court is an interesting outlook toward solving cases related to crypto hacks. However, it is important to see what happens with the retrieval process in the coming weeks.