Prominent blockchain diversity leader and founder of Women in Blockchain Talks, Lavinia D. Osbourne, has won a significant early victory in the High Court of England and Wales, which is the first of its kind to recognise NFTs as legal property capable of being frozen, until the case is resolved. While courts have previously acknowledged cryptocurrencies as legal assets which can be the subject of court injunctions, this is the first time that NFTs – increasingly popular unique blockchain-based digital assets – have had the same treatment.
The case involves two “Boss Beauties” NFTs, representing unique digital artworks, which were removed from Osbourne’s digital wallet without her knowledge or consent in January. Boss Beauties is a woman-led initiative with profits from its NFTs used to create opportunities for women through mentorship programs and scholarships.
Working with security and intelligence firm Mitmark, Osbourne was able to locate the NFTs in two separate wallets. Osbourne then appealed to the High Court to obtain an urgent injunction to freeze the assets, which was granted on 10 March. This injunction was subsequently extended until the end of proceedings at a hearing on the 31 March.
Hacks and theft are increasingly a common problem for NFT holders. As the space is still a ‘Wild West’ when it comes to legal recourse or regulation, this can mean that those who have their NFTs stolen are not guaranteed to have them returned. These legal rulings recognise for the first time that NFTs, like cryptocurrency, are property, giving NFT holders legal recourse to push for the return of stolen assets.
Osbourne’s Barrister, Racheal Muldoon, of London-based chambers, The 36 Group said: “This case sets an important precedent in recognising that NFTs are property under the law of England and Wales, capable of being the subject of interim injunctions. It is a further example of the High Court leading the way internationally by assisting cryptoasset holders to secure the return of their digital assets”.
Osbourne concluded: “As this case, and the increasing number of hacks and scams in the NFT space shows, digital wallets and smart contracts aren’t infallible, and can even affect experienced users in the space like me. Now that NFTs are legally recognised as property, NFT holders will finally be able to regain some control when things go wrong.
“This case will hopefully be instrumental in making the blockchain space a safer one, encouraging more people to interact with exciting and meaningful assets like NFTs.”