In one of the first cases of its sort, a Singapore court has imposed a freezing injunction prohibiting the sale of a Bored Ape non-fungible token, which might have far-reaching implications for digital assets.
A court ruled that the NFT, from the famous Bored Ape Yacht Club series, should not be sold until an ownership dispute is resolved after it was foreclosed on as collateral for a debt.
According to Hagen Rooke, a lawyer at Singapore law firm Reed Smith LLP who wasn’t involved in the case, the law recognizes both fungible and non-fungible tokens as forms of property to which court injunctions can attach, and the NFT case is a consistent application of the same idea.
“It is the first decision in a commercial dispute where NFTs are recognized as valuable property worth protecting.” “So more than merely strings of numbers and codes imprinted on a blockchain, the implication is that NFT is a digital asset and people who invest in it have rights that can be protected.”
Shaun Leong, lead counsel for the case and equity partner of Withersworldwide
Singapore considered BAYC NFT as a valuable asset
The claimant, a Singapore resident who, according to the case filing, is a regular borrower on NFTfi, a platform that allows consumers to utilize NFTs as collateral for crypto loans, is a citizen of Singapore and is an active dealer in crypto and digital assets.
The defendant goes by the username chefpierre.eth. But the identity and physical whereabouts of the user, which is unknown, is a regular lender on the platform, according to the lawsuit.
According to the declaration, the BAYC NFT No. 2162 is “one of the Claimant’s most prized assets, and is irreplaceable to him,” and he has “no intentions to ever part with or sell it.” According to the petition, he used the NFT as collateral to borrow cryptocurrency because “because of its rarity and high value,” he could secure greater loans.
The claimant requested a refinancing of a loan for which the NFT in question was used as collateral in mid-April, but after some back-and-forth, chefpierre agreed to a limited repayment period. Chefpierre foreclosed on the NFT when the claimant was unable to pay, according to the complaint. In this instance, the claimant claims “unjust enrichment.”