The “saga” that unfolded (and still is continuing to develop) when the world collectively learned that Seth Green’s new series White Horse Tavern was under threat because its main character, a Bored Ape NFT Green named Fred, was stolen via a phishing scam has made for a good laugh.
The very notion of the creator of Robot Chicken pleading and negotiating for the return of his “kidnapped” noncorporeal star from its new owner, Darkstar84 (or Drwerty), was prime junk food for critics of the NFT space.
But the humor of the situation has given way to renewed conversations around the incredibly nebulous legal interpretations surrounding NFT ownership, consumer protections within web3 markets and the ever-present topic of copyright.
Green’s quest to recover his Bored Ape led him to start tweeting about making “precedent setting debates on IP ownership & exploitation” in regards to NFTs — clear hints that he was ready to take the issue to court.
He has since connected with Drwerty, though no deal appears to have been made yet that would transfer the NFT back to Green, so it appears any legal proceedings are on hold. But that doesn’t make Green’s assertions about establishing new parameters regarding the structure of IP rights of NFTs any less wrong.
Just to be clear, Green is patently wrong, and it’s mainly due to the very system he’s become enamored with. The majority of NFT projects do not relinquish copyright of the sold token to the buyer, but rather grant the buyer the ability to license and exploit their token to varying degrees. The Bored Ape Yacht Club is no different, hence why Green would be able to make derivative works, such as an uninspired rom-com whose only selling point is that the NFTs are in the real world (and one has Etherium eyes).
But that licensing agreement only applies to the current owner of the NFT, which currently isn’t Green. As Wired points out, the traditional art world has safeguards in place that protect an author’s IP ownership in the event that a work is stolen, but those don’t necessarily extend to NFTs due to how rights are linked to the NFT itself. And since Drwerty bought the token without knowledge of its theft (as far as we know), Green’s IP rights transferred to them as well.
This whole situation is obviously frustrating for Green, as it would be for anyone. It was enough for him to bemoan it live on stage alongside fellow crypto-evangelist Gary Vee after debuting a trailer for White Horse Tavern at VeeCon last month. But this whole situation is just another installment in how those deeply invested in making these turbulent marketplaces the next big thing don’t fully understand the beast their promoting.
Despite the absolute deluge of scams present in both crypto and NFT spaces, there still remains very little in the way of protections for those affected by bad actors. It’s why you see so many pleas via social media whenever fraud occurs on the blockchain: the system isn’t set up to address these issues in any effective way due to its decentralized nature. OpenSea may return tokens from wallets flagged as suspicious here and there, but it is rare. There is no clear path of recourse in a case such as Green’s. You either move on or try to negotiate a return of your stolen item.
This is the system that Green endorses when he makes a TV series that only appeals to people already bought into the NFT craze or when he promotes his own NFT project, PizzaBot. He is trying to onboard people into a market where consumer protections largely amount to “be careful out there,” which is exactly what he said in response to the reporting of another phishing scam on Twitter.
It’s laughable in the most frustrating of fashions.