In a sequence of events which firmly fuses the decentralised realm of NFTs with that of the centralised legal system, Singapore’s High Court has blocked the trading of a Bored Ape NFT amid its involvement in a loan disagreement. As with the case’s legally-binding prowess, OpenSea has since disabled the asset’s ability to be traded on the platform.
The ape in question, BAYC #2162, is owned by Singaporean crypto assets dealer Rajesh Rajkumar, and was used as collateral in a NFT loan agreement with pseudonymous NFT collector ‘chefpierre’. The agreement, which was facilitated by NFT lending platform NFTfi on March 19th, reportedly included the option for ‘refinancing deal’ to take place a month after it was initiated. However Rajkumar is claiming that chefpierre did not abide by such extension, and instead foreclosed on the loan which ultimately released the NFT from the platform’s escrow to chefpierre’s wallet.
In wake of such events, Rajkumar is alleging ‘unjust enrichment’ has taken place, which in doing so, has led to the decision to cease the asset’s ability to be traded.
Although the case’s conclusion remains to be seen, and whilst lawyers have been alluding to the legal complexities which can arise within loan agreements which involve pseudonymous parties (something NFT-finance is prone to), a spokesperson from OpenSea has spoken on the platform’s polices with regards to legally-questionable assets:
“While we don’t offer details about enforcement actions on individual collections, I can share that our platform policies and Terms of Service explicitly prohibit the use of OpenSea to buy, sell or transfer stolen items, fraudulently obtained items, items taken without authorisation and/or any other illegally obtained items or launder money”.