Riding The Wave News Summary #58
Bored Ape Yacht Club’s Creators Declared War on a Vocal Critic. Could it Backfire?, & more
Welcome to Riding The Wave. If you have questions or feedback, please reply to this email. If you are new to the Newsletter, please check out what we provide on our about page and consider subscribing. Within the Newsletter, I provide News Summaries, Weekly Status Updates, & Deep Dive Articles on Specific Topics (Ex: How do I pick which coins/tokens to buy?). More details here
News
Table of Contents
Tweets
Bored Ape Yacht Club’s Creators Declared War on a Vocal Critic. Could it Backfire?
Bitcoin 'cheap' at $20K as BTC price to wallet ratio mimics 2013
Tweets
Bored Ape Yacht Club’s Creators Declared War on a Vocal Critic. Could it Backfire?
A prominent artist claims that the biggest NFT brand on Earth is secretly run by a conspiracy of Nazi trolls. The artist sold a copycat collection of the brand’s NFTs, netting him some $1.8 million (shared among the four people working on the project). Some called it a clever political statement, others a naked cash grab.
Now the brand is suing the artist, and the implications of the case could be more far-reaching than either party anticipated.
the multi-billion dollar company is very narrowly accusing Ripps of infringing on the Bored Ape trademark. It may well be that what Yuga isn’t alleging offers more insight into the case and the current state of the NFT industry.
“That’s really important, really kind of unusual, and interesting and unexpected,” University of Kentucky law professor Brian Fyre told Decrypt, speaking about Yuga’s choice to wholly avoid the question of copyright infringement in its lawsuit against Ripps.
Copyright and trademark infringement, though often closely associated, are two very different things. Copyrights protect the content of a work: the plot of a book, the visual elements of a painting, the chorus of a song. Trademarks, on the other hand, safeguard business names, logos, and slogans that constitute a brand. By not pursuing copyright infringement, Yuga is essentially letting slide the fact that Ripps copied thousands of Bored Ape NFT images and sold them for millions of dollars, without changing a pixel. Why?
In Steiner’s interpretation, the law would see every subsequent Bored Ape as some variation of those “originals.” For instance, imagine drawing an earring on an image of Mickey Mouse. That’s not a brand new mouse with full-throated copyright protection. That’s Mickey with an earring. Such a reading of the law would leave the vast majority of Bored Apes, over 99%, effectively worthless in terms of licensing.
Delving into matters of copyright in a courtroom could, therefore, open a Pandora’s Box for Yuga. The issue “introduces a lot of complications that I suspect Yuga didn’t want to deal with right now,” said Fyre.
The same goes for defamation. While Fyre thinks Yuga has more than enough evidence to go after Ripps for defamation, “they didn’t, and I think that was a very wise decision.”
Why? Because in a defamation suit, both sides have access to discovery. Ripps would be granted the legal right to request any number of Yuga’s private correspondences to try and prove his claims that Bored Apes are secretly racist. Even if Ripps is just trolling—and it certainly wouldn’t be the first time—such an opportunity likely would amount to a months-long field day for the artist and his followers, and a never-ending PR nightmare for Yuga.
The claim centers on Ripps’ use of the Bored Ape logo and brand. Ripps titled his NFT collection RR/BAYC, promoted an “Ape marketplace” in association with it, and made the collection’s logo a Nazi-inspired riff on the original BAYC logo.
“If I were to go out and try to gin up a project that would tick as many boxes of trademark infringement as possible,” said Fyre of Ripps’ collection, “I mean, he did a bang-up job.”
Yuga just needs to show that the value of Ripps’ collection is linked to the value of BAYC.
“Yuga has to win on two sides here. They have to convince a courtroom, but they also have to convince the public,” said Tenkhoff. “It is so very important that you get the Web3, NFT, and Twitter communities behind you.”
While Yuga may run into issues due to them creating a lawsuit I would be surprised. With their approach of selling the IP to their NFT’s the only component they still have control over is organizing new subprojects/follow-up projects, organizing events for the community, & protecting the overall project’s brand. As this lawsuit aims to protect the brand I would expect owners and the community to view this as more of an action on behalf of the NFT space rather than an attack on it. It also helps that Ripps is no friend of the NFT space meaning not many NFT enthusiasts will default defend him.
Another point of why I would expect the community to be welcoming of this is that a case protecting the trademark would help other NFT projects protect there’s in the future giving the space more mainstream validity and helping to negate the “copy and paste“ NFT viewpoint.
‘I’m out millions of dollars’: Thousands of crypto investors have their life savings frozen as Voyager files for bankruptcy protection
Robert first came across Voyager Digital in March 2020.
Like countless others, he decided to give the cryptocurrency broker a try. The platform was easy to navigate. It offered him an up to 9% annual percentage yield (APY)—much higher than a traditional savings account. It claimed to be FDIC (Federal Deposit Insurance Corporation) insured. And being a publicly traded company on the Toronto Stock Exchange, he thought, how bad could Voyager be?
both of them are unable to withdraw any of their money, as the company suspended trading on July 1 and filed for Chapter 11 bankruptcy protection late Tuesday.
Voyager also is not FDIC-insured, despite its advertisements that “In the rare event your USD funds are compromised due to the company or our banking partner’s failure, you are guaranteed a full reimbursement (up to $250,000).” Its “banking partner,” Metropolitan Commercial Bank, is FDIC insured, but Voyager is not.
Voyager, however, is trying to restructure and not liquidate, meaning that it hopes to return at least a percentage of its customers’ investments, according to its court filings. Voyager also said in court filings that it may potentially offer shares or tokens in its reorganized company to customers post-bankruptcy. But in the meantime, its customers struggle being unable to withdraw their savings. As they await next steps, some have even shared thoughts of suicide and depression online.
Just weeks before Voyager filed for bankruptcy protection, CEO Stephen Ehrlich stated that customers’ assets were safe. In early June, Voyager tweeted that all “products and services are fully operational and remain unaffected by current market conditions, including trading, rewards, deposits, and withdrawals. We take risk management very seriously, and safeguarding customer assets is our number one priority.”
The company stated that it “never engaged in DeFi [decentralized finance] lending activities.”
“I did every single thing a reasonable person would do, which is go through and look at the company,” Robert said. He noticed that the company wasn’t targeted by regulators and thought that was a good sign. “I should have known. Everything in hindsight, obviously, is a different thing.”
Of course, Voyager users are also hoping that they will soon have access to their savings.
“Hope, unfortunately, is not a plan, but there’s nothing I have control over,” Robert says. “All I need is to get my original assets back. I don’t need the rewards or the interest earned. I just need the assets back.”
This entire situation is horrible and it reinforces the view that it’s important to diversify your funds across several dimensions beyond just assets. As many users held all funds in Voyager they have been left unable to pay rent or make other day-to-day expenses. They will often not have access to any of these funds for months to years. I do think Voyager will have major issues with lawsuits due to them misrepresenting themselves as insured as well.
Keep reading with a 7-day free trial
Subscribe to Riding The Wave to keep reading this post and get 7 days of free access to the full post archives.