The crypto industry has consistently made breaking news in recent weeks for both bad and good reasons, and it does so once again. This time the focus is on Singapore, where a Singapore High Court blocked the sale and transfer of a bored ape NFT. More details to follow below:
A Singaporean man has obtained a court order to prevent the sale and transfer of a non-fungible token (NFT) that he previously held. The order, imposed by the Singapore High Court last Friday (May 13), is also thought to be the first in Asia – and maybe the world – to defend an NFT in a purely commercial dispute resolution case.
According to details seen in several documents obtained, the High Court’s injunction was served to protect and prevent the sale or transfer of a Bored Ape Yacht Club (BAYC) NFT that a Singaporean man is attempting to reclaim from an online character known and referred to only as “chefpierre.”
Why the fuss?
Non Fungible Tokens (or NFTs for short) are a type of digital asset that reflect physical items like music, art, video, and even in-game goods. They are usually purchased and traded online using cryptocurrency. They are typically encoded using the same foundational software as many cryptocurrencies. The Bored Ape Yacht Club (BAYC) NFT collection is an NFT collection made up of several distinct apes, each one unique from the other.
Despite their somewhat “simple-looking” design, BAYC NFTs are highly sought-after luxury items, with several celebrities, including Canadian star Justin Bieber, supposedly owning one. In fact, Madonna was said to have purchased an NFT from this collection last month for a price rumored to be around 180 Ether, a price which, when converted to fiat currency, stands at about S$777,000 (US$560,000).
The Court Case
A search of the Singapore High Court’s website revealed the complainant’s name in this commercial dispute case to be Janesh Rajkumar. Mr Janesh is attempting to reclaim the BAYC No. 2162 NFT, which he offered as security to obtain a loan from “chefpierre.” Mr Janesh is attempting to reclaim the BAYC No. 2162 NFT, which he used as security for a loan from “chefpierre.” He claims, among other things, that he is the legitimate owner of the NFT and that “chefpierre” unlawfully took it from him.
According to him, the BAYC No. 2162 NFT is a very unique item, even among BAYC NFTs, due to its characteristics, which include the possibility to produce a new NFT of another special series. He also stated that he has previously used this NFT as borrowing collateral on a community platform known as “NFTfi” due to its scarcity and high monetary worth.
He said that in each borrowing arrangement, he always took special care to indicate that he was unwilling to cede possession of the NFT and would always return the loan in full to redeem it.
Mr. Janesh previously had a successful loan arrangement with “chefpierre”; however, the problem started after he made a second loan arrangement which he was unable to pay back in the stipulated time frame.
As a result, he requested an extension, and the two parties also began discussing the possibility of a third loan. In this new arrangement, “chefpierre” agreed to refinance the earlier, yet to be repaid loan.
However, “chefpierre” afterwards refused to release the additional sum agreed to at the third loan agreement and threatened to seize ownership of the Bored Ape NFT if the previous loan was not completely returned on April 21, no later than 5 a.m.
This new deadline meant Mr Janesh had just about seven hours to return the money he borrowed (which he did not), resulting in “chefpierre” acquiring BAYC No. 2162. Mr Janesh eventually reimbursed a portion of the debt, but “chefpierre” returned the money and barred the Singaporean from making additional payments.
According to court records, “chefpierre” has subsequently advertised BAYC No. 2162 for sale on OpenSea (an online NFT marketplace). According to a news statement released on May 18 by Mr Janesh’s legal representatives, the Withers KhattarWong law firm, the Singaporean High Court’s order recognizes NFTs as an asset.
The injunction also follows a groundbreaking judgment by a UK court that recognized NFTs as “legal property.”