Hong Kong is helping to advance the use of blockchain in legal settings.
Tokenized legal notices now help combat the inability to connect with offenders.
Other regions like the US and the UK also explore blockchain for legal use.
In a significant development, Hong Kong courts have introduced blockchain to send legal notices to crypto wallets. This new model makes sending notices to wallets involved in illegal activities easier. Unlike traditional methods, this approach helps deal with the problem of hidden identities in crypto transactions.
According to Cointelegraph, this development follows a court order involving two wallets on the Tron blockchain, where the court froze assets tied to an online scam. This move shows that Hong Kong is becoming more open to using blockchain for legal matters.
The Rise of Tokenized Legal Notices in Hong Kong
Serving legal documents in the crypto industry has been challenging for years. Traditional methods like in-person delivery, mail, or email often fail when dealing with anonymous crypto wallet owners.
In one case, a court order froze 2.65 million USDT stolen in an online scam. Some funds were moved to exchanges before the notices could reach the wallets. Only 1 million USDT is currently left in the wallet, which has now been frozen.
These challenges prompted Joshua Chu, a cybersecurity expert at Macro Systems, to develop the technology behind the tokenized notices on the Tron network. This is especially notable as the Tron blockchain, despite its significant achievements, is often associated with illicit activities.
This innovation has helped Hong Kong authorities freeze suspicious wallets seamlessly using digital tools. This method has effectively restricted engagement with the frozen wallets and prevented further transactions.
Chu explained that if a transaction goes through with frozen assets, it would violate criminal law. Additionally, centralized exchanges would likely hesitate to engage with these wallets. This is because of their legal obligations related to Anti-Money Laundering (AML) and Know Your Customer requirements.
Notably, using blockchain to serve legal notices is not unique to Hong Kong. Countries like the US and UK have also tried this approach. However, Hong Kong’s move is particularly notable because it prevents suspects from using anonymity as a defense.
Macro Systems plans to expand its technology to work with other blockchains, such as Ethereum and Polygon, in response to the increased illicit exploit on both chains. Efforts are already in motion to launch on the Bitcoin network later this year.
Global Legal Systems Embrace Blockchain
Hong Kong’s use of tokenized legal notices is a growing trend. Courts across the globe are now exploring blockchain technology for legal proceedings. In the UK, the High Court recently froze stolen NFTs in the Osbourne v Persons Unknown case.
The legal documents were sent using NFT airdrops. In the US case LCX AG v. John Doe Nos. 1-25, legal papers were sent directly to anonymous crypto wallets. This ensured the defendants received the notice despite remaining anonymous.
Although blockchain in the legal world is still new, these cases show how it can help solve tough legal problems. However, experts like Laurenth Alba from Rome Protocol say the legal community still finds blockchain confusing.
Problems like lack of standard rules and global legal differences make enforcing laws adopting this method hard. This highlights the need for better cooperation between blockchain and legal systems.
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Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.