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Landmark case recognizes Bored Ape NFT as an asset
Singapore issues injunction against the sale of image procured through questionable foreclosure
For the first time, a court has issued an injunction to stop the sale and transfer of a non-fungible token (NFT) at the request of a previous owner.
NFT digital art seen on smartphone. Bored Ape Yacht Club (or BAYC) is the collection of the most expensive NFTs
"We are the first law firm in Singapore, and one of the first few in the world, that is successful in obtaining a worldwide proprietary injunction to freeze a Bored Ape Yacht Club (BAYC) NFT sale on the blockchain against a Metaverse personality," said international arbitration and litigation specialist Shaun Leong on law firm Withers KhattarWong's LinkedIn page.
The Singapore High Court issued an order in the commercial dispute over the jovial beanie-wearing ape on May 13, thus restoring its ownership to Janesh Rajkumar, after it had been used as collateral in a loan and subsequently seized.
Rajkumar had used his NFT to borrow Ethereum from public persona and Twitter afficionado "chefpierre" on NFTfi. The ape was to be held in escrow by NFTfi until the loan could be repaid with the stipulation that the loan could be extended.
However, rather than extending, chefpierre foreclosed on the loan, shifted the NFT to his personal Ethereum wallet, and listed it for sale in OpenSea.
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"This injunction recognizes NFTs as an asset," said Withers KhattarWong in a canned statement, adding: "The case is also unique as it allows for the service of court papers to be effected via social media such as Twitter, including on Ethereum's platform."
The high court in Singapore (the disc shaped building on the left) was designed by Norman Foster and opened in 2005
Leong asserted that the ruling is important as it recognizes that Singapore courts can take jurisdiction over assets sited in the decentralized blockchain.
Around 10,000 BAYC apes exist worldwide as a collection of pictures of apes in costumes with varying facial expressions, with some owned by celebrities including Madonna, Eminem, and Jimmy Fallon. Their price peaked at $434,000, or 152 ETH, in April 2022 on online NFT marketplace OpenSea.
The UK also had a recent landmark ruling in January when it recognized the digital art tech as legal property, froze two stolen NFTs, and returned them to the digital wallet of the owner.
Since then, BAYC's Instagram was hacked, leading to the theft of about $3 million from the digital wallets of NFT enthusiasts. ®