Legal point of view who owns a stolen Bored Ape

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https://news.bloomberglaw.com/ip-law/seth-greens-stolen-bore…

This is interesting because the lawyers boil it down to NY law where if someone steals something they possess it but do not own it.

Bored Apes Yugo Labs gives the owner of the ape copyrights. But the NFT contract does not say if the owner now in the secondary market can transfer the copyrights. That can go either way.

The bottom line according to one of the lawyers as NFTs develop people say oh this is all new and is not a legal matter as usual. The lawyer is saying NFTs must still fall into the common legal framework as property.

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This is all very interesting from a legal point of view, but I’m not qualified to comment on that aspect.

But it seems clear that the major mistake was not avoiding blockchain the first place. Had Green simply licensed the artwork directly none of this would have happened. Instead he went all high tech and screwed himself. A bunch of lawyers are involved, his show is delayed, all totally unnecessary.

And although art is subjective…his bored ape is some pretty crappy artwork. He could have commissioned an artist to create something way better than that, and at far lower cost. And again could have avoided all kinds of unforeseen complications.

If someone mentions a deal involving blockchain, don’t walk. Run.

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syke,

The actual but at times rare study of fine art is very objective. Most people do not know that.

The under 45 folks are reacting to the older folk’s work. Meaning every damned thing my generation produces is supposed to have so much damned meaning. Looking into the artists soul gets old.

The Apes are a big so what among other things. A purposeful aesthetic saying as much.

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The bottom line according to one of the lawyers as NFTs develop people say oh this is all new and is not a legal matter as usual. The lawyer is saying NFTs must still fall into the common legal framework as property.

Exactly. That’s the point we were trying to make to you in the other thread. And that’s why NFT’s are a terrible mechanism for trying to sell something, whether it’s artwork or anything else. As syke6 pointed, by using the blockchain and NFT’s, Yuga and Green made a relatively simple transfer of IP far, far worse - to the point of breaking it.

NFT’s are not constructed to meet the requirements of law to transfer ownership. They’re constructed to meet the technical requirements of the blockchain. So they don’t work to legally transfer ownership - of anything. At common law, changes to a distributed ledger between pseudonymous accounts do not by themselves actually transfer ownership interests in things.

I don’t believe that’s an issue that can be solved by adding more “stuff” into the NFT. It’s inherent in the way that blockchains operate. Blockchains don’t have Terms of Service, and they’re not legal entities that can enter into contracts. So they don’t have any mechanism for setting up the necessary legal agreements between blockchain participants that would be necessary for these transactions to actually be transactions - actual transfers of an interest from one party to another.

Albaby

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Al,

The case with Green is the transfer of copyrights. That is a specific business arrangement that the apes chose.

In my case I wont be doing that. It is non issue in my sales.

The point is the options are far too many. Not just the NFT but the huge number of business options. Yes many will fail. Opting out is the best.

That does not mean buying and selling NFTs is the problem. That means that aspect of the NFT contract is problematic. Especially as apes set it up.

In the stock market if you buy a dead cat bounce in a dot com in 2000 it is the same as betting on a crazy crypto idea. Opting out is the best thing.

Yes legal problems will plague the business people who make mistakes.

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The case with Green is the transfer of copyrights. That is a specific business arrangement that the apes chose.

In my case I wont be doing that. It is non issue in my sales.

Au contraire, mon frere. The issue with Green isn’t that Yuga chose to transfer copyrights. It’s that they chose to link the transfer of copyrights to whoever owns the NFT, rather than just selling them to Green. Which means that this issue isn’t really a copyright issue, but an issue about who owns that NFT.

The entire blockchain system for transferring NFT’s (and indeed other tokens) is based on the premise that whoever the blockchain shows owns an asset is the owner of the asset. IOW, if the blockchain record shows that I’m the owner of a given NFT, that proves I own it. It’s trustless and decentralized.

But the Seth Green scenario breaks that premise. The blockchain shows that Darkwing84 owns that NFT. The “real world” legal system regards Seth Green as the owner of that NFT. That’s not supposed to happen - “code is law.” The blockchain can’t function the way people think it is functioning if the trustless, decentralized system isn’t reliable. But it’s not. The blockchain doesn’t document ownership.

That’s a core flaw of trying to use blockchain technology to conduct transactions - not just limited to transactions where copyrights are involved. When you “buy” an NFT using blockchain, the blockchain transaction doesn’t legally involve actually entering into a transaction with the seller. You’re directing the blockchain to just change what wallet is “written down” next to the token, away from the current wallet and into your wallet. The assumption that everybody is making is that by writing this into the blockchain code, you are changing who actually owns the token. But that’s not how the law works.

Albaby

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Au contraire, mon frere. The issue with Green isn’t that Yuga chose to transfer copyrights. It’s that they chose to link the transfer of copyrights to whoever owns the NFT, rather than just selling them to Green. Which means that this issue isn’t really a copyright issue, but an issue about who owns that NFT.

Al,

I like you. I have held off on saying this a few times. Because we are discussing this. But this time…KISS!!

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I like you. I have held off on saying this a few times. Because we are discussing this. But this time…KISS!!

Fair enough. And BTW, I don’t know that any of these problems will necessarily affect your ability to make money selling NFT’s, in the near term. These are problems with what the buyers are getting, not what the seller is getting. In the long run, of course, buyers will ultimately stop showing up if there’s a problem with their ownership interests in the NFT’s - but in the short run, these types of legal issues are going to be largely invisible to them.

Albaby

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buyers will ultimately stop showing up if there’s a problem with their ownership interests in the NFT’s


Al,

Pullleeeaase......many people here keep saying that about the equities market. But are long.

It is only a sort of wishful thinking as if a fact.

I do agree tarnishing things can hurt. It can also help if as I will deal with the honest parts of it and value will flow there.
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Pullleeeaase…many people here keep saying that about the equities market.

I might have missed it, but I don’t recall anyone here suggesting that purchasing securities in publicly traded companies might not be legally sufficient to transfer an ownership interest in those securities to you.

This is not a debate about whether the investment is good or bad. It is an issue about whether using an NFT actually transfers to the purchaser the ownership interest in that investment that the seller and buyer believe is being transferred. That issue doesn’t arise with publicly traded securities, because those securities are directly governed by a whole bunch of statutes, are regulated by the SEC (among other agencies), and generally fit within longstanding state laws governing the transfer of ownership of assets.

You keep treating this as a criticism of whether investing in digital art is a good investment. That’s not the issue. It’s about whether using a blockchain to transfer NFT’s is legally adequate to transfer ownership.

Albaby

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dot cons?

to

wild catters in the 1980s aftermath

Enron to Lehman Brothers

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The courts are moving my way from zero forward to yes it is an exchange of wealth for property. That is a contract.

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Albaby1,
You have an incredible amount of patience,I must say.

Jk

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Albaby1,
You have an incredible amount of patience,I must say.

I’d totally hire albaby1 as my attorney. He never gives up.

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The courts are moving my way from zero forward to yes it is an exchange of wealth for property. That is a contract.

Do you have a link to that?

You can certainly sell an NFT to someone IRL in a way that is legally sufficient to form a contract. A great example is the Beeple sale of his NFT through an auction house. Beeple would have signed a specific contract with Sotheby’s, all of the bidders would have signed contracts with Sotheby’s as well, and those contracts would have been sufficient to establish the formal transfer of ownership of the NFT from Beeple to the eventual purchaser. There is the multi-party equivalent of a Bill of Sale that moves ownership from seller to buyer. IOW, there is an off-chain agreement which is sufficient to meet the legal requirements necessary to transfer ownership.

Blockchains, though, don’t work that way. A blockchain is not a legal entity, and doesn’t have the legal capacity to contract. It doesn’t have terms of service. It’s just an object - an enormously large ledger (Bitcoin) or computer program (Ethereum). You’re not entering into a contract with it. Neither is your ostensible counter-party. Nor are you actually entering into a contract with each other - it’s not like Ebay. Although these things are referred to colloquially as “smart contracts,” they’re not actually contracts. They’re code.

Again, this is not a problem for you as the Seller. You’re getting ETH, which are purely fungible. You’ll never have to prove up that you own those tokens. It’s your buyer who can’t ever prove that he’s the owner of the NFT he thinks he owns, because he never entered into a contract with you to buy it. Just a lot of code with pseudonymous accounts. The same things that make the blockchain trustless and decentralized make it an inadequate vehicle to convey legally demonstrable ownership.

Albaby

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You have an incredible amount of patience,I must say.

Not patience. Curiosity.

I don’t engage in these discussions because I want to browbeat the other person into accepting what I’m saying. I genuinely want to know if what I’m saying is wrong.

I don’t understand crypto and NFT’s. I mean, I know how they work. But I don’t understand why people believe the things they believe about them.

Not the price part of them. Look, if people want to believe that a limited edition of anything - Bitcoins, rookie cards, Franklin Mint plates, stamps, whatever - is going to go up in value because it is rare and therefore people will want to buy more of them, that’s fine. I might not agree, but I understand.

What I don’t understand is why people think that when they transfer money to have an NFT moved to their wallet that they’re buying anything. So I engage with Leap, who says they’re going to be getting into the NFT business, hoping he’ll explain how people who give him money are actually getting anything in return.

As I understand it, the blockchain ledger is the equivalent of a huge book. Leap is going to write in that book a description of their art (maybe even write the art into the book itself) next to their wallet name. Other people have wallet names in the book next to ETH balances. If someone writes Leap’s wallet name next to some ETH, then the book will change the wallet name next to the art description from Leap’s to the other person’s wallet.

But that’s it. All Leap is “selling” is the right to have this big blockchain book show someone else’s wallet next to the description of the art. But having your blockchain wallet next to the artwork description doesn’t mean you own it. Or that you own the description. Or anything. It just means that your wallet is the only one in that specific blockchain book that’s written next to the art description.

As long as people pretend that having your wallet name written next to the art description means something, then that’s of some value, I guess. But it doesn’t mean anything in the real world. No one else has to acknowledge that having “purchased” the entry in a big blockchain book means that you’ve actually acquired any ownership in the thing that’s written next to it in the big blockchain book.

So I’m trying to figure out why people seem to think that it does. I’m hoping Leap can explain it, since I can have a conversation with them in a way that I can’t with someone like a Mark Andreesen.

Albaby

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“I can explain it to you but I can’t comprehend it for you” (Edward Koch)

“There is only so much stupidity that one man can prevent.” (Andrew Marshall)

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So I engage with Leap, who says they’re going to be getting into the NFT business, hoping he’ll explain how people who give him money are actually getting anything in return.

That alone explains a bit. His proposed business seems to depend on his customers belief that they are getting something of value (art in this case?) when they acquire the NFT. I’ve never been very good at sales, but I seem to recall that one hallmark of a good salesman is a strong belief in whatever it is they are selling. So he/she needs to believe that the art is being transferred along with the NFT.

As to the actual issue you raise: Could the artist record a document, similar to a real estate deed, that acknowledges they are the creator of the art and that the owner of the art will be whomever has their name written next to the art’s NFT described as [fill in the description] on the XYZ blockchain. That seems like it might create the missing link between the NFT and the actual art.

—Peter

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Guys,

In the Al cheerleading section he has not told me anything I do not know.

NFTs are contracts and property. The abstract notions leave enough ambiguity for all of his repetitive arguments.

Stop confusing Al’s repetitive arguments as patience. He is only repeating the gray areas on and on. I know them already.

Al is also pointing out that most crypto business are scams. That is getting over stated as crypto anything is a scam. Al’s logic there is a geeralization that wont hold up.


Al et al, my comparison to equity markets is better suited to a comparison of crypto to the options market. Meaning crypto in some ways is a derivative of a currency. NFTs are a derivative of a property with contract.
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Al,

You are asking for a link to the courts moving from zero to recognizing NFTs are an exchange of property for wealth? 

I linked this already. I did note to you that you did not read that post. You said you did. 

I will link now the UK high court's ruling as a news article. 

[https://news.artnet.com/market/uk-high-recognizes-nfts-as-pr...](https://news.artnet.com/market/uk-high-recognizes-nfts-as-property-2108605)

Artnet is the major news outlet in NYC on the fine art world. 

This is not your area of the law. Unlike the couple of people here rallying you onward this is not in fact your expertise at all. You are not misleading the posters here you have stated that a couple of times. 

I appreciate your discussing this with me. I am happy to share information with you.