- The injunction is said to be the first one issued in Asia to protect an NFT.
- With the new ruling, NFTs can now be considered a form of property.
- This may set a precedent for NFTs to be recognised as property in a court of law.
The Singapore High Court has ruled that NFTs can be considered a form of property.
Last Friday, Justice Lee Seiu Kin ruled that NFTs and digital assets meet certain legal requirements, such as being distinguishable from other assets of the same type or others, as well as having an owner capable of being recognised by third parties.
This ruling came after The Singapore High Court issued an injunction on May 13 to stop the sale and ownership transfer of a Bored Ape #2162 previously owned by a Singaporean man named Janesh Rajkumar. The injunction is said to be the first one issued in Asia to protect an NFT, meaning that the high court recognises the NFT as an asset.
According to court documents, the claimant is seeking to repossess the NFT, which was used as collateral for a loan from an anonymous NFT collector named “chefpierre”, who remains absent and unrepresented in court documents.
While the claimant said that he purchased the NFT with the intention of keeping it for himself, he had also often used it as collateral to borrow cryptocurrencies on NFT lending platform, NFTfi.
Previous court documents stated that the claimant had successfully used the NFT collateral for multiple loans and paid them back. He specified in the loan agreements that he was unwilling to relinquish ownership of the NFT and would repay the loan in full to claim it back.
After failing to pay “chefpierre” at the stipulated time, the claimant asked for an extension, with the lender offering to refinance the loan and the claimant agreeing to it.
According to Singaporean law firm Withers KhattarWong, “chefpierre” broke the extension agreement and foreclosed on the loan, causing the NFT to be released from escrow into “chefpierre’s” wallet.
Following this incident, Justice Lee approved the claimant’s request to serve “chefpierre” court papers through Twitter, Discord, and “chefpierre’s” crypto wallet address.
The new ruling may set a precedent for NFTs to be recognised as property in a court of law, and paves a way for Singapore to further claim its position as a blockchain hub.
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