A high-profile lawsuit between Yuga Labs – the creator of the Bored Ape Yacht Club (BAYC) NFT collection – and influencer Jeremy Cahen (Pauly0x) is entering a new phase, as the company requests the court to seize nearly $400,000 from Cahen's crypto wallet to enforce the legal ruling.
The lawsuit stems from the 'derivative parody' of BAYC
Everything began in July 2022, when #YugaLabs filed a lawsuit against Jeremy Cahen and artist Ryder Ripps for releasing an NFT collection called 'Ryder Ripps Bored Ape Yacht Club' – accused of infringing the BAYC trademark. Ryder Ripps claims this collection is a form of parody and protest, alleging that BAYC NFTs contain racist imagery and are linked to Nazism.
However, the court disagreed with that argument. By October 2023, the court ruled that the defendant must pay $1.5 million in damages. By February 2024, the damages were increased to nearly $9 million, including attorney fees and interest accrued after the ruling.
Yuga Labs is tracking assets and taking seizure actions
Since the judgment officially took effect on March 3, 2024, Jeremy Cahen has not paid any amount nor requested a stay of enforcement, paving the way for Yuga Labs to proceed with asset recovery steps following the ruling.
The company has sent a subpoena to Cahen's accountant for information and is cooperating with the U.S. Marshals to send asset freeze orders to major banks and exchanges such as: Bank of America, Chase, Wells Fargo, Robinhood, Coinbase, Binance, and Gemini.
According to court records, immediately after receiving the freeze order from Gemini, Cahen transferred $396,946 worth of crypto to two new wallets – an action Yuga accused of intentionally hiding assets to evade enforcement. All of these assets include Bitcoin, Ethereum, and the PEPE token, and are currently subject to recovery in Yuga's latest court order.
'Mocking the court's ruling' and personal scandal
Yuga Labs claims Cahen is 'mocking the court's ruling' by not cooperating in the asset investigation. Although Cahen argues that he is not obliged to comply with the asset search request because he is in the appeals process, he has not filed a motion to stay enforcement in accordance with procedures.
In addition to the legal troubles from the lawsuit with Yuga Labs, Jeremy Cahen is also wanted in Puerto Rico for serious assault charges and is among the top 10 most wanted people in San Juan – the capital of this island nation. Cahen's latest project – a decentralized exchange named Pond0X – has also been labeled a 'scam' by many in the community.
The court has not yet issued a ruling on Yuga Labs' latest asset seizure request.
Contacting the crypto community and Binance users
The above case presents an important lesson for the market #NFT in particular and the crypto community in general: brands and intellectual property rights are increasingly being protected rigorously, even in decentralized spaces. For those investing in NFTs or developing Web3 projects, special care must be taken regarding legal factors to avoid risks like Cahen's case.
Moreover, Binance users holding NFTs or participating in Web3 projects should also be cautious: ensure the origin and transparency of the project, avoid engaging with projects that show signs of imitation or lack clear legal foundations.
Crypto is a high-potential field but also carries many legal and security risks. Always do thorough checks before investing and comply with regulations in your country. #anhbacong