The demise of crypto companies like FTX has not only brought the crypto market to a standstill, it has also raised questions about the once-thriving market for non-fungible tokens (NFTs).
A collection of 10,000 NFTs made up of various digital monkeys, the Bored Ape Yacht Club (BAYC) was perhaps the most iconic symbol of last year’s NFT craze. Professor Andrea Baroncelli, who studies cryptocurrencies and NFTs at the City University of London, said it was the “most media attention”. “It exploded with multiple celebrity moves and was seen as a status symbol.”
But the celebrities who promoted BAYC in December said, sued Suspicion of artificially inflating the value of NFT. The complaint lists stars such as Justin Bieber, Madonna and Paris Hilton, alleging they secretly paid influential figures to promote their collections through misleading promotions. claims.
The investment value of the BAYC collection has also taken a hit in the past few months. December saw his $76 million Bored Ape NFT sales on the second-hand market, compared to his $346 million peak in January 2022, according to Reuters. crypto slam, An NFT aggregator that publishes sales data. During that time, his NFT average sales for the collection dropped from $238,000 to his $86,000.
According to Merav Ozair, a blockchain expert and professor of fintech at Wake Forest University, the downfall of FTX and other cryptocurrency companies has not only impacted NFT sales, but also increased regulation. are also connected. The U.S. Securities and Exchange Commission (SEC) reportedly Yuga Labs, which owns the Bored Ape Yacht Club, is investigating whether offering digital assets violates federal law. We are also investigating his ApeCoin, a cryptocurrency given to owners of BAYC NFTs. “Regulation is coming to the cryptocurrency market and NFTs are no exception,” he said.
Yuga Labs, a Miami-based company, is also in the midst of a dispute over trademark and copyright law. In June, Yuga Labs lawsuit A Los Angeles court against artist Ryder Ripps argued that Ryder Ripps’ use of BAYC images in his own NFT collection infringed Yuga Lab’s trademark.
Questions over Bored Ape’s copyright protection
The lawsuit concerns trademark rights applicable to Ripp’s use of the BAYC logo and name, but Ripp has since counterclaim About the copyright covering the BAYC NFT image itself. In a December court filing, Ripp asked the court to declare that the BAYC NFTs are not subject to copyright protection.
This could have significant ramifications for Yuga Labs, which claims to transfer copyright to BAYC NFT owners, thereby increasing its value to NFT owners.
However, as Yuga Labs tried to persuade the court to avoid copyright issues rather than trademark infringement, it became clear that it did not actually obtain copyright registration for BAYC NFT. “This court should not examine whether Yuga Labs owns the copyright in Bored Ape’s images, as such opinions are merely advisory. Yuga Labs is not copyright registered. Hmm,” Yuga Labs replied in his Jan. 18 email. Court submission.
Copyright arises automatically when you create an original work, but copyright infringement occurs in the United States, according to Christian Tenkopf, a Munich-based attorney at intellectual property law firm Taylor Wessing. You must be registered to exercise your rights by filing a lawsuit. Rights and NFTs. However, he said it remains unclear whether the artwork underlying many of his NFT projects is copyrighted, as he uses AI in creating the images.
The United States Copyright Office has consistently taken the position that artwork must be created by humans. Registeredaccording to Zahr Said, a professor of copyright and trademark law at the University of Washington School of Law.
“A larger question that remains unanswered in the legal community is whether artwork associated with NFTs is subject to copyright protection when created with the help of artificial intelligence and algorithms,” Tenkov said. said.
Yuga Labs’ attorney, Eric Ball, said in a statement that Yuga Labs owns the copyright. “It is a well-established law that copyright exists when an author creates something unique and puts it down on paper. Federal copyright registration is also voluntary and not required.”
