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Intellectual Property and the Apes of Wrath
I have struggled with how to open this newsletter based on how utterly stupid the situation I am about to describe is, and thus I will skip right to it.
Let’s establish some facts.
Actor and producer Seth Green purchased Bored Ape Yacht Club #8398 in July 2021 and planned to, and I quote, “[exploit] the IP to make it into the star [of a TV show.”
Green then fell foul to a phishing scheme that pilfered three apes and something called a “Doodle,” leaving Green apeless and despondent. He allegedly found this through a “guttercats clone site,” by which he means a website that was pretending to be for “Gutter Cat Gang,” another NFT project with artwork that is genuinely ugly in an almost impressive way. The ape in question was then sold to DarkWing84 for $200,000 (I’m so tired).
It turns out that, in the preparation of said TV show (which looks astonishingly bad), Green had used the intellectual property of Bored Ape #8398, and because DarkWing84 had possession of the ape…Green no longer had the intellectual property for the TV show.
As a side note, the ape in this show was called “Fred Simian,” possibly the laziest name you could give a cartoon monkey.
Buzzfeed’s Sarah Emerson had a vast and well-reported piece about the situation, including Seth Green’s desperation in trying to re-acquire his ape:
Seemingly aware of the problems his ape’s new owner could cause, Green has spent the last several days tweeting at DarkWing84 in an attempt to reclaim the Bored Ape, appealing to them again on Monday to “work it out between us.” A Green supporter even sent DarkWing84 a message by way of an ENS domain that spells out “contactsethgreenontwitter.eth.” It’s unclear if DarkWing84 knew the ape was illicitly obtained when they purchased it, and they did not respond to a tweet from BuzzFeed News.
To be 100% clear, Seth Green is a colossal idiot, not just for buying one of these stupid apes, but because of his extremely stupid security practices. If there was a magical object that granted ownership of something - specifically the intellectual property underpinning a television show - the best security advice you can give is to put that object somewhere disconnected from the internet.
Sidenote: Okay, this is where I suppose I have to explain some stuff.
In most cases, when you interact with Ethereum or another blockchain, you use a software wallet (MetaMask, for example). You store your tokens - fungible and otherwise - in said software wallet, and every interaction is made by clicking a few buttons and then waiting. In the case of a hardware wallet (here’s an explainer), every interaction requires you to approve it using the password on the device, making it a bit slower but significantly more intentional. Technically you could take the passphrases from said hardware wallet and put them into a software wallet, but the idea is the added security of having the physical device means that you’re less likely to, say, interact with a stupid site and open your entire wallet up to someone else.
This means that if you want to move fast, you keep things in a software wallet, but if you want to be cautious, you put them in a hardware wallet. Sure, there may be hardware wallets that let you move a bit faster, but for the most part the physical interactions give you enough pause to say “hmm, perhaps GutterCatzReal.Info isn’t a good site.”
What you can also do with a hardware wallet is put something on it and then put it somewhere else. The physical wallet - which is, in reality, a physical security device that accesses a digital wallet - is a great way to make sure that you don’t do something stupid because without the physical device, you can’t make the transaction. It gives you a pause.
Other great security practices involve “not putting several objects worth hundreds of thousands of dollars in the same place” and “not recklessly interacting with smart contracts using the storage method of several hundred thousand dollars of objects.” This is why the cryptocurrency industry is so utterly ridiculous - depending on your situation, you can literally be one click away from exposing your entire financial life to someone. It’s like walking around with the deed to your house, the signed title to your house, and the world’s fastest, quietest notary, ready to commit you to whatever confusing decision you think you’re making.
What’s incredible about this story is how perfectly it encapsulates the realities of crypto’s libertarian paradise. Green - who is a colossal buffoon for just about every move he’s made here - is already crowing about going to court to secure his ape, even though his ape was, technically, voluntarily handed over. Even if it wasn’t, DarkWing84 purchased it legitimately and has every reason not to sell it - it’s attached to what may be a nationally-broadcasted television show, making it worth more money. And as always, the victim of the scam (Green) is claiming that he should be given back the Ape because he needed it for something - and seems to believe he has a degree in Ape Copyright Law. Whether Green is libertarian is immaterial to the larger fact that he believes - as every single scammed crypto person does - that despite interacting with and enjoying a permissionless, decentralized, and “anonymous” system, they should be able to seek the very remedies that - by design - do not exist in the system.
The real danger isn’t so much that DarkWing84 has the ape now but that they may retain it and sue Green if he attempts to use their IP in his show. It’s reasonable to ask why Green didn’t seek to sever the IP from the NFT, especially when planning a TV show using it, but at this point, it very much seems that DarkWing84 has the intellectual property and thus the rights to be compensated for its use. While cryptocurrency people generally don’t like the courts, in this case, they must support them only in defense of DarkWing84.
If the cryptocurrency industry were dedicated to a single one of their wretched ideologies, they would be fighting against Green. This isn’t just a story about one rich, stupid idiot losing an incredibly expensive link to a picture - it’s a rich guy using his resources to intimidate someone that participated in good faith in the cryptocurrency ecosystem. Green messed up, but the point of cryptocurrency and the blockchain is that it’s (currently) unburdened by the laws of man, and thus any attempt to make it through capitalism is surely antithetical to their entire ideal system. If Green successfully intimidates (legally or otherwise) DarkWing84, he has proven that cryptocurrency is simply another way in which rich people increase their wealth. In a vacuum, why is Green’s claim over this ape any more valid than DarkWing84’s? Because it was sent to someone via a smart contract that Green fully agreed to, even if he didn’t understand the exact things it was doing?
On a legal level (though I am not a lawyer), I imagine that if Green is successful in his case (if such a case manifests), this can set a precedent for NFTs that involves them being seized from the hands of legitimate buyers. On a very basic level, the cryptocurrency industry should be defending DarkWing84 - they are a victim of circumstance, and they are legitimate in their ownership of a $200,000 JPEG that can now not legally participate in a television program that it’s featured in without their permission.
And they’re not up in arms, because deep down none of these people actually care about “democratization” or “freedom,” just more flexibility to do the stuff they like and, of course, the ability to suppress things they don’t like. If they cared about the soul of their industry, they’d be terrified (aside from any legal situation) that a rich man with a huge following is intimidating a legitimate participant in their economy.
If they’re not alarmed, they should be, because very stupid situation could end up proving how little anything they’re doing matters. If Green is able to intimidate (and by proxy “reverse” the transaction by forcing the return of the NFT), Ethereum and every other cryptocurrency are only immutable and irreversible based on whether or not someone litigates. It’s irrelevant whether Green believes that cryptocurrency should operate in the truly permissionless sense, but even if he successfully intimidates or brokers a deal with the person in question, this is just another sign of how very centralized the blockchain becomes for the rich.
It is also painfully, wonderfully funny. A big stupid idiot with a lot of money bought four stupid JPEGs for tens or hundreds of thousands of dollars, and then went around online playing with smart contracts using the same wallet they were in, despite knowing that one of them was the underlying property of a TV show. It is a story that’s unique to cryptocurrency only because at its core, cryptocurrency is built extremely recklessly, in the sense that you can quite literally sign away everything if you click the wrong “accept” button.
What really makes me crack up is that this is exactly what many cryptocurrency people wanted - portable intellectual property that can be exchanged without expensive lawyers and the court system.
Except the actual result is the ability to lose the rights to air your own TV show because you wanted to buy an ugly picture of an anthropomorphic cat.