NFT company secures court order to freeze wallet after hacker stole $250,000 worth of assets

NFT company secures court order to freeze wallet after hacker stole $250,000 worth of assets

A British company, NFT Investments, has announced that it has gotten a restraining order to freeze assets in a wallet. On January 12, the company alerted the public of a cyberattack in which it lost assets valued at $250,000. The assets were traced to the wallet, which has been frozen as ordered by the court.

Getting stolen assets frozen

NFT Investment is a company that renders its services to small businesses involved in NFT-centered activities. The company revealed the move that secured the freezing of the assets at the Regulatory News Service arm of the London Stock Exchange (LSE), where its shares are listed. The type of asset stolen by the hacker was not specified.

The company stated that it initiated action immediately after the hacker stole the assets by engaging its lawyers in the United States. The move yielded results, with the company obtaining a temporary order that restrained activities on the wallet containing the stolen assets.

“As a result, the online wallet containing NFT Investments’ stolen assets is frozen, and the assets cannot be moved by the perpetrators,” a statement from the company said.

They added that after securing the order from a Delaware court, there are still several legal steps required before the assets are returned to the company. NFT Investment stated that it is still working with its lawyers to have the assets returned.

An unknown hacker

Even though the hacker is still unknown, the company said that the hacked assets account for less than 1% of its total holdings. This was confirmed from its unaudited account in September, which showed that it held $36.6 million in assets. This is despite a loss of 4 million GBP year to date ending June 30, 2022.

There is a limit to what people can do when they lose their cryptocurrencies or tokens to fraudsters. The limitations are mainly due to the absence of comprehensive legislative frameworks covering cryptocurrency and blockchain-based assets in many jurisdictions.

However, legal injunctions are increasingly being explored in some countries by entities seeking redress to hacks resulting in losses. The popularity of crypto assets and the increasing activities of cybercriminals will see the courts play more active roles in this regard, especially when lost funds are traced to centralized exchanges.

More enforcement actions on tainted assets imminent

The transparency of the technology behind cryptocurrency and the visibility of these exchanges is bridging the third-party involvement that Bitcoin was originally designed to exclude, making it possible for law enforcement agencies to track wallets holding tainted assets and enforce court orders.

The industry is increasingly seeing legal freezes and forfeitures of NFTs and cryptocurrencies when the assets are traced to crimes, especially in the US and Canada. Even with the best blockchain analysis tools, there are still limitations involved in tracing assets linked to crimes, especially when a malicious player uses an efficient coin-tumbling service.

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