NFTs as Legal Service? Patagon’s Attempt to Serve SpartacusDAO Takes an Unexpected Twist

Spartacus lured in many investors with the promise of high ROI and passive income

A legal battle is underway right now with potential implications for NFT technology. On Thursday, a federal judge upheld his decision to freeze $35m in crypto assets held by SpartacusDAO after serving notice to the defendant via NFT. What do we know about the SpartacusDAO lawsuit?

image of Spartacusdao logo , key I the nft legal case

I am Spartacus! No, you are under arrest
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The SpartacusDAO Legal Case

Last year, investors in the SPA token filed a lawsuit against Wei Wu, the founder of Spartacus. As a result, Judge Victor Marrero of the Southern District of New York filed a restraining order against Wu. This decision kept Wu from handling the company’s treasury funds worth approximately $35m.

Wu, however, has not responded to any communications from the court. After repeated failed attempts of reaching Wu and no-shows for court-appointed appearances, the court came up with an interesting solution. The State of NY created an NFT with the legal notice and sent it to the founder as a means to serve notice.

NFT Legal Notice

A federal court using NFT technology is a major win for the crypto industry. It shows a real use case for the tech and is a rare example of the US government actually helping crypto adoption versus always trying to destroy it. In the future, this case could be seen as a precedent for increased usage of NFTs moving forward for additional legal applications.

There have also been precedents set for using NFTs to give legal notice. In June, a New York court allowed a restraining order to be filed via NFT. The UK also recently ruled that NFTs can qualify as legal notice in a case against Binance Holdings.

Interestingly enough, the court also used Discord to reach out to Wu. The court joined the Spartacus Discord channel and posted the legal notice in the server. The post was immediately deleted, however.

Nelson Rosario, a crypto-focused attorney, commented, “Especially in the crypto space, people have to take what they can get, and if the only manifestation of a party that wronged you is via a Discord server, well, that’s where you have to go.”

Spartacus was one of the most popular protocols on Fantom

SpartacusDAO’s slick interface and sky-high returns turned out to be a trap for investors

What is SpartacusDAO?

SpartacusDAO is an OHM fork on the Fantom blockchain. It became popular for a brief period last year thanks to its outrageous ROI, at times exceeding 10,000% per year. Unfortunately, the protocol collapsed. Disgruntled investors utilized the DAO part of the SpartacusDAO to demand the team forfeit control of the remaining treasury.

The Spartacus team ignored these requests. Instead, they redeemed their tokens and sold them for $4.3m. Wu continues to avoid similar attempts from the community to regain control of the treasury. Consequently, investors have resorted to legal remedies to salvage some of their funds.

One prop trading firm, Patagon, led the charge against Spartacus. The company’s CEO Diogenes Casares supports the usage of NFT and Discord to help reclaim the money. After using real-world records to identify the pseudonymous founder of Spartacus as Wei Wu, he felt that these methods were sufficient legal notices.

Casares wrote, “It’s the same way that if you serve someone, put the letter on their doorstep with a giant thing saying ‘this is a legal letter,’ and then they throw it out – that’s contempt of court.”

As of now, it does seem like the SDNY Federal Court agrees with this sentiment.


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