A Brazilian court has granted the use of inappropriate tokens (NFTS) in cases that include missing bitcoin (BTC) associated with the suspicious pyramid scheme BWA Brazil.
The decision arises from a legal action filed by a trustee appointed by the BWA Brazilian bankruptcy property court.
The real estate requested that the court grant digital services of the process by minting NFTs containing relevant legal documents and sending them to the wallet address associated with the initial transaction.
The verdict stated:
“Creditors who suffer millions of dollars will not be further harmed by delays in legislation to keep up with innovation. Therefore, we will allow the court-appointed trustees to take all necessary steps to carry out this interrupting protest (suspending the deadline for litigation) via electronic communications using the NFTS.”
Additionally, the prosecutor's office submitted a positive opinion in support of the trustee's petition.
This major targets digital assets holders whose identity remains unknown but have wallet addresses that can be traced through the Bitcoin blockchain.
The property claims that around 11,200 BTC has been acquired using creditor funds. At current prices, 11,200 Bitcoin is worth more than $900 million.
According to filings, these transactions occur before bankruptcy and are subject to potential recovery procedures.
Big scheme
BWA Brazil was founded in 2017 by Paulo Roberto Ramos Bilibio and established itself as an investment company offering BTC exposure. We provided monthly returns fixed at 5% on client deposits. This is an impossible outcome based on variable return assets such as Bitcoin.
However, the company freezes its withdrawal in early 2020, leaving customers with an estimated loss of $300 million. It's about $52.2 million. Authorities estimated this was one of Brazil's biggest losses related to the alleged crypto pyramid scheme.
In July 2020, a Brazilian court approved the BWA's filing of judicial recalls and argued that it would be refunded to the client. However, less than a year later, another court order changed the process from judicial recovery to bankruptcy, claiming that the company had not made any effort to pay its clients.
Bilibio and his partner Jessica Da Silva Farias are allegedly used the money held by BWA to buy BITCOIN. Both remained massive and have not yet been arrested.
Blockchain traceability enables new legal processes
The trustees emphasized that despite the anonymity of the wallet address, Bitcoin's technological architecture allows for tracking of individual coins. Once placed in a wallet, BTC can be transferred repeatedly, but each transaction is permanently recorded on the blockchain.
The filing acknowledged that while some assets were moved through centralized exchanges, others could have been transferred via a peer-to-peer method that bypassed third-party intermediaries.
Authorities may be able to identify the ultimate beneficiary when including exchanges residing in Brazil.
However, peer-to-peer transfer using asymmetric encryption poses a major challenge to attribution and provides the procedural innovation required for direct notification via the blockchain.
The use of NFTS to initiate legal notices illustrates the adaptation of procedural norms to address the unique characteristics of blockchain-based financial activities, as courts tackle the jurisdiction and the complexity of evidence in decentralized asset flows.
Arabic
Chinese (Simplified)
Dutch
English
French
German
Italian
Portuguese
Russian
Spanish