In a groundbreaking move towards digital justice, the High Court of Hong Kong in the case of Worldwide A-Plus Ltd v. Holders of Wallet Address a.o., Action No. 2417/2024 ordered the service of a court order directly to cryptocurrency wallets using tokenization technology.

Case Background

• The case involves Worldwide A-Plus Ltd., a marketing consultancy firm that fell victim to a fraudulent scheme, resulting in the loss of approximately $2.66 million in Tether (USDT).
• The perpetrators, using alleged deceptive tactics, convinced the firm to transfer funds to two wallet addresses on the Tron blockchain.
• Due to the anonymity of blockchain transactions, traditional legal channels proved ineffective in directly notifying the wallet holders of the legal proceedings.

Blockchain as a Means of Service

• Recognising the limitations of conventional methods, the Hong Kong High Court ordered the use of tokenized legal notices, a first-of-its-kind approach in the jurisdiction.
• The notices were airdropped directly into the implicated Tron wallet addresses, effectively freezing the assets within those wallets and notifying the owners of the legal action.

Precedents and Global Impact

Hong Kong’s move aligns with global trends in leveraging blockchain for legal proceedings.

Similar approaches have been observed in the United Kingdom in the case D’Aloia v. Persons Unknown [2022] EWHC 1723 (Ch) and Osbourne v. Persons Unknown & Ors [2023] EWHC 340 (KB) in which the Court approved the service of legal documents via non-fungible tokens (NFTs).

Challenges and Future Prospects

Despite its innovative nature, blockchain-based legal notifications may raise several challenges:

• Legal Recognition: The widespread adoption of blockchain notices will require legislative amendments and judicial interpretation to confirm their enforceability across different jurisdictions.
• Technical Barriers: Courts, lawyers, and regulatory bodies must develop expertise in blockchain technology to effectively implement such measures.
• International Cooperation: Given the cross-border nature of cryptocurrency transactions, international legal frameworks need to be aligned to ensure seamless enforcement.

Conclusion

The above case marks a significant step toward modernising legal processes in the digital age

By embedding legal notifications directly into the blockchain, common law jurisdictions have demonstrated the potential of digital justice to bridge gaps in traditional enforcement mechanisms.

Given the universal development of cryptocurrency regulations and blockchain-based enforcement, other common-law jurisdictions such as Cyprus may also consider in the near future employing similar approaches to address legal challenges in the modern digital financial world.