The top NFT marketplace OpenSea disables trading of rare BAYC NFT #2162 as the Singapore High Court issues a freezing injunction blocking the sale of the NFT.
The injunction granted by the Singapore High Court is claimed to be the first in Asia, and globally to safeguard an NFT in a purely commercial dispute, thus the injunction recognizing NFT as an asset.
According to a statement from Singaporean legal firm Withers KhattarWong, an individual named Rajesh Rajkumar was able to obtain the injunction from the Singapore High Court halting the NFT sale when a loan agreement with pseudonymous NFT collector chefpierre.eth failed.
Withers KhattarWong partner and international arbitration and litigation specialist, Shaun Leong, stated “We are the first law firm in Singapore, and one of the first few in the world, that is successful in obtaining a worldwide proprietary injunction to freeze a Bored Ape Yacht Club NFT sale on the blockchain against a Metaverse personality.”
Shaun Leong went on to say that the precedent-setting decision is noteworthy because it recognises that Singapore courts can exercise jurisdiction over assets held on decentralized blockchains.
NFT investor Rajesh Rajkumar borrowed Ethereum on NFTfi, a community platform that acts as an NFT-collateralized cryptocurrency lending marketplace, using BAYC #2162 as collateral.
This allows him to withdraw funds from the NFT because Ethereum can be invested to earn interest.
BAYC NFT #2162 is unique since it is the only one wearing a beanie and has a jovial expression, as well as being a ‘virgin ape’ who has not been fed mutant serum. According to Rajkumar, this increases the value of BAYC #2162.
Rajesh Rajkumar and chefpierre.eth signed a loan agreement on March 19, 2022, and a re-financing agreement on April 20, 2022.
Rajkumar sent BAYC #2162 to NFTfi’s escrow account as part of the refinancing agreement, to be kept until Rajkumar completed full repayment of the loan, with the understanding that the Refinancing Loan could be extended.
When Rajkumar failed to return the loan, chefpierre.eth foreclosed in violation of the contract, transferred the NFT to his personal Ethereum wallet, and placed the NFT for sale on OpenSea.
Rajkumar is principally seeking an order compelling chefpierre.eth to accept payment of the loan for the repurchase of BAYC #2162, as well as a transfer of BAYC #2162 to Rajkumar’s cryptocurrency wallet.
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