Akin Win for Celsius Litigation Administrator, NY Bankruptcy Court Allows Legal Notices Sent via NFTs

(New York and Dallas) – Akin has secured a significant win at the U.S. Bankruptcy Court in the Southern District of New York on behalf of the Litigation Administrator for Celsius Network LLC and its affiliated debtors, in connection with certain adversary proceedings arising in or relating to In re Celsius Network LLC, et al., No. 22-10964 (MG) (Bankr. S.D.N.Y.).

On October 24, 2024, Chief Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York granted the firm’s motion for alternative service on behalf of the Litigation Administrator, authorizing the Litigation Administrator to effect service on certain defendants accused of holding fraudulently transferred assets by airdropping non-fungible tokens (NFTs) into their digital asset accounts – a service method the Court described as “innovative.”  The airdropped NFTs will include a hyperlink in the name of the token that, when clicked, will bring the user to a website with the relevant complaint and summons.  Judge Glenn ruled that this manner of service comports with due process because the defendants are likely to receive the summons and complaint via NFT and website since the NFT will be airdropped into the wallets used by the defendants to receive the fraudulent transfers at issue in the complaints.  Based on evidence submitted by the Litigation Administrator, the Court was satisfied that the owner of a wallet is unlikely to have changed hands since the fraudulent transfers occurred. 

The Akin team was led by litigation partner Mitchell Hurley and included litigation partner Elizabeth Scott and associate Michael Stanley.

Akin is a leading international law firm with more than 900 lawyers in offices throughout the United States, Europe, Asia and the Middle East.

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