NFT ownership structure protects thieves

Seth Green capitulates, pays $260k in ransom to retrieve monkey face, sets ugly precedent

Actor Seth Green's Bored Ape NFT, stolen weeks ago by way of a phishing scam, has been returned to him after he appears to have paid $260,000 ransom. 

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There have been no arrests.  No insurance can be claimed, as it is not even clear if capturing the controlling data of an NFT without paying for it is, in fact, a crime.

Seth's Bored Ape #8398 was ripped off in a phishing scam, just as easily and ridiculously as if it had been his credit card information, by an anonymous party. The thief then apparently sold it to (supposedly) another party less anonymous but who claimed ignorance over the stolen status, who then sold it back to Seth.  Unlike other property, it is as yet apparently not a crime to sell a stolen NFT.  This brings me to my primary observation since the outset of this absurd cartoon caper.

What's wrong with this picture

If Mr. Green's ape were a standard trademark and/or domain name, he wouldn't have lost it, and selling it once duped in a phishing scam would have been a crime.  The fact that this intellectual property could be stolen, anonymously held, re-sold, and sold back to the rightful owner with no apparent repercussions, is owing almost entirely to the fact that the title to Bored Ape #8398 is held in the form of an NFT.

A Licensing Nightmare

In the licensing world, this presents a challenge.  If I am considering licensing intellectual property titled to its owner in the form of an NFT, how do I know the same thing won't happen again?  Licensees could put millions of dollars into promotion of assets, only to have the underlying control shift to someone else, who is not party to that contract and perhaps has no obligation to fulfill the original owner's end of the deal.  Why would I put money into promoting something that it's basically ok to steal?  What if the buyer of the stolen NFT had trademarked it?  The list of questions will go on for years.

Some things never change

It is again apparent that the lawyers will be the ones getting richest from the NFT craze, for years to come.  For now, I'll continue to utilize traditional ownership titling methods, including filing defensible, real trademarks and domain names.

NFT ownership titling method may protect thieves; facilitate scammers

Are legacy brand ownership methods proving more secure than blockchain?

The recent phishing theft of the Seth Green NFTs brings the reality of the dark world of crypto's blockchain technology to the forefront.  

You wanted anonymous ownership?  So did the people looking to steal your stuff. 

Now a thief has stolen a well-known NFT into which significant investment has been made to bolster upcoming production and licensing.  Then the thief re-sold the NFT to what appears to be a third, innocent party.  The thief is in the "ether," so to speak, protected by the very technology that titles the art, and props up its very value.

Scam GutterCats clone site. I’m crazy careful with separate wallets and security but still got got. Luckily it’s art not crypto so they can be traced. For anyone that bought them, we can work something out.

— Seth Green (@SethGreen) May 17, 2022

Three things appear clear at this point:

1. NFT ownership battles are going to rage in the courts for years before they are settled law;
2. Lawyers will get richer than owners, and;
3. Settled law around traditional titled ownership (trademarks, internet domains, etc.) appears to be much more defensible for years to come.

I suspect Seth Green wishes he had utilized standard ownership documentation and protections, after pumping tens of thousands of dollars into promotion of the intellectual property, and missing the opportunity he had secured.  It's value now is certainly not based on its blockchain ownership titling.

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