Globally famous digital properties and asset auctioneer OpenSea was directed by the High Court of Singapore to halt auction of an erratic NFT known as ‘BAYC NFT #2162’ at the complaint of non-fulfillment of a particular loan agreement.
OpenSea is currently the leader in selling some of the erratic and high-profile NFTs in the world. The digital properties auctioneer was about to sell a BAYC NFT, particularly #2162, which is considered one of the rarest NFTs. However, the sale was halted under the specific instructions of a High Court in Singapore which suspended the sale through order. It was reported that a case was filed in which the filer had sought court’s indulgement in the performance of a loan agreement.
It was reported that case was filed by a man named Rajesh Rajkumar who engaged Withers KhattarWong for representation before Singapore High Court. At the request of the complainant, an injunction order was passed by the Court in his favor and against chef Pierre.eth i.e. a globally famous NFT collector. It was alleged that the NFT collector failed in performing its loan agreement with the filer which led to the filing of proceedings.
International Mediation and Arbitration expert of Withers KhattarWong firm namely Shaun Leong claimed that the case was one of its kind. He said that never ever before in Singapore, a Court had ordered an injunction order against sale of a digital asset. He further claimed that chef Pierre.eth, which is an individual from a Metaverse, failed to fulfill the terms and conditions of the loan agreement. In order to stop the Metaverse personality from disposing off its assets, an injunction order was obtained by stopping OpenSea to suspend the sale.
The background of the dispute was that at some point in time Rajkumar had obtained an Ethereum-based loan. Against the loan, he provided loan provider (NFTfi) security of his NFT collection namely BAYC # 2162. Under the loan arrangement, Rajkumar was entitled to utilize his mortgaged NFT whenever he needed funds earned as interest. This was so because the Ethereums were further investable under the terms and conditions of the loan agreement. According to Rajkumar, his NFT collection is the rarest because the ape comprised in the NFT is a virgin ape and hasn’t mutated ever. For this very reason, the NFT becomes a highly valuable NFT collection and therefore worth much more than what the OpenSea auction could earn.
The loan agreement between the parties was extendable and had already been extended once on 20th April, 2022 for refinancing purposes. However, the loan provider refused to refinance and went on to sell the security for settlement of the outstanding loan amount towards Rajkumar. However, Rajkumar went into Court and obtained a restraining order.
It may be clarified that the order passed by the Court is an injunctive order which means it is for a temporary basis. Furthermore, the order does not automatically attach the property which in the present case is the BAYC’s rare NFT collection. A precedent however has been laid down in the jurisdiction of Singapore which suggests that even on digital assets the Court can exercise its jurisdiction.