Crypto Cat Fight: Why There Are Legal Claws for the Solana Meme Coin Shark Cat

The very specific problem is: Let’s say you want to take pictures of your pet and post them online. So let’s say that photo becomes a viral meme. After all, the meme inspired a crypto token that quickly generated hundreds of millions of dollars. billions) value.

Soon your pet will become the hottest thing in the cryptocurrency industry. Soon she will turn anonymous traders you’ve never met into millionaires. But you don’t. Soon, descriptions of your pets – some cute, some not-so-savory – will be flowing into isolated Discord and Telegram chats around the world.

Let’s say you want it all to stop. So what?

Since the advent of meme coins, pet owners have been dragged, voluntarily or not, into the most hyperactive depths of cryptocurrency culture. Sometimes, relationships arise between these pet owners and the cryptocurrency communities they inadvertently create. prosper; Sometimes sparks flew uncomfortable tension.

Now, the escalating feud between cat owners and the cat-inspired cryptocurrency community is testing the limits of the fragile relationship between pets and the meme coins that profit from them. Cryptocurrency legal confusion.

Enter: Shark Cat.

At the end of last month, Solana token shark cat (SC) is starting to make waves on social media amid an influx of pet-themed meme coins. ruling DeFi trading. The coin was inspired by an image of a kitten named Nala wearing a small shark costume, and used that photo as the centerpiece of its marketing strategy.

In a short period of time, Shark Cat has grown explosively, soaring to a market cap of an astonishing $390 million, leveraging Nala’s name recognition.

Everyone who participated was a 1,000x winner. Excluding, of course, Nala and her owners, who are named Pookie.

At first, Pookie had no idea that his cat had been dragged into the cryptocurrency frenzy. meme coin fever. Then, earlier this month, an Instagram user contacted her and offered to pay her $15,000 in exchange for the rights to use Nala’s photo in her unrelated meme coin.

Intrigued, Pookie started looking into unfamiliar territory: cryptocurrency, to figure out what was going on. She soon discovered that there was not just one meme coin using Nala’s likeness. many. At the top of the pile was a shark cat that seemed to be worth as much as the GDP of a small country.

Pookie contacted Shark Cat’s leadership. From there, things started to head south.

It turns out that the token is run by a group of five men who claim that they did not start the coin, but simply banded together to keep Shark Cat afloat after its anonymous creator abandoned ship. legally dangerous The world of DeFi.

Pookie said these men told her they would be willing to support charities she had worked with in the past. Or, you could help auction off an NFT of Nala’s photo, like other pet owners in similar situations have done. completed previously.

But Nala was not just a cat. And Pookie was more than just a cat owner.

After Nala went viral in the early 2010s, Pookie realized she needed to get her kitten’s burgeoning fame under control. She carefully built Nala’s brand online, growing the cat’s Instagram following. biggest More than any other cat on the planet, with 4.5 million followers. She filed several cat-related trademarks, created a website, and still sells clothing, toys, and appliances decorated with Nala’s iconic mug. She even started a successful job cat food business.

So Pookie had a strong feeling of inadequacy. She told the Shark Cat team she wanted more. “I need a little more skin in the game,” she said. They gave her $3,000 worth of Shark Cat or Solana tokens. At that point she asked to sit down.

In a Zoom call earlier this month (which, crucially, prompted the Shark Cat team to reveal its face and legal name), Pookie asked for a 10% stake in Shark Cat. At the time, its value was about 20 million dollars (about 20 billion won).

She also requested a formal transfer of control over the project and its direction. While researching Shark Cat, Pookie discovered a sticker in Coin’s Telegram chat depicting Nala with a prominent erection, brandishing a gun, and gambling. She was worried about this.

“It’s vulgar.” Pookie said. decryption. ““If she is trying to buy this coin on Telegram and someone who supports our pet food sees it, they will start to question who we really are.”

According to the Pookie and Shark Cat team, the Zoom call quickly fell apart. said the Shark Cat team. decryption This was in part because someone they described as a “prominent hedge fund figure” joined the call to advocate on Pookie’s behalf and demand payment from SOL.

Pookie said that person was her friend who understood cryptocurrency better than her and offered advice. She denies that she or any of her friends have ever asked to be her SOL. The call soon became hostile. Pookie says that’s when she realized she didn’t want Nala’s appearance associated with the Shark Cat token.

“The moment they raised their voices on our team, it became clear that we couldn’t work with them as we tried to make things happen,” Pookie said.

Things escalated from there. A few days after the Zoom standoff, Team Shark Cat presented Pookie with a counteroffer for 2.5 million Shark Cat tokens (said to be worth more than $600,000 at the time), refusing to cede control of the tokens. From the email reviewed: decryptionThey told Pookie that if he didn’t accept those terms within 90 minutes, the deal was over.

At the same time, Pookie chatted with the team about another meme coin related to his cat. This token, White Coffee Cat (WCC), was based on Coffee, another cat with cancer. The WCC team told Pookie that they care about the cat’s plight and want to focus their token community on charity work and raising funds for Coffee’s ongoing chemotherapy.

Under duress, Pookie agreed to allow the token to use Coffee’s likeness in exchange for a symbolic 1% stake of the token (which was then worth only $500).

That’s when things got ugly in typical crypto fashion.

The Shark Cat team took notice of Pookie’s dealings with WCC and immediately posted a letter online announcing that negotiations with her had ended.

Shark Cat team members mocked Pookie and her teammates on Twitter as “greedy opportunist pigs” before vowing to continue the Shark Cat project without her consent.

Shark Cat holders are delighted by rumors that Pookie is considering legal action and have doubled down on their aggressive stance.

“Bitch, you can’t sue blockchain!” 1 cryptocurrency user satisfied.

“They are literally as stupid as the FEC (sic) and Gary rolled into one.” be booed Citing criticism of Pookie and her colleagues by the Chairman of the U.S. Securities and Exchange Commission (SEC) and the cryptocurrency industry Gary Gensler.

In fact, you can’t sue the vague and virtually meaningless concept called “blockchain.” But it turns out that you are almost definitely You can sue other U.S. residents who have profited hundreds of millions of dollars from your work.

Brian Frye, a law professor at the University of Kentucky who specializes in intellectual property and cryptocurrency, describes himself as a hard-core skeptic of most infringement claims made by IP owners.

But even he admits that the facts of the Shark Cat story don’t sit well with the meme coin team.

Despite the presence of shark cats assert The token image still contains Pookie’s photo of Nala, despite the fact that they have no legal liability whatsoever since they never adopted the name “Nala”. It is continuously used. shark cat account On Twitter. The photo is central to the Shark Cat brand identity. This work is also protected by Pookie’s copyright.

This photo, the meme behind the coin, is essential to how Shark Cat was able to amass a valuation of hundreds of millions of dollars, Frye says. This is a very bad thing in copyright trials, where it is easy to prove infringement but much more difficult to prove damages.

“There’s a pretty reasonable argument that basically all (Shark Cat) revenue comes from copyright infringement,” Frye said. decryption. “The only reason this meme coin is popular is because it piggybacks on (Nala’s) brand identity.”

Additionally, one of the biggest hurdles in typical cryptocurrency litigation – determining who the potential defendants actually are and where they are located – appears to have already been overcome.

During a tense Zoom call with the Shark Cat team, Pookie mentioned the token team’s actual legal names. They all left their usernames on the screen. After a cursory search of LinkedIn based on the team members’ appearances, Pookie quickly discovered that at least one of Shark Cat’s top brass lives and works in the United States.

“There’s a lot of money, there are defendants, and it’s really easy to prove infringement,” Frye said. “I mean, it’s not very good… “The truth is, it’s bad.”

It remains to be seen whether Pookie will actually try to get all of Shark Cat back in court. Once she gains control of her coins, she said, she will donate the proceeds to charity.

However, the Pookie and Nala cat team issued a press release saying they would take legal action, and subsequently sent cease and desist notices to some of the Shark Cat team members who revealed their identities via Zoom.

Meanwhile, the value of the Shark Cat token has plummeted 70% since hitting an all-time high in less than three weeks.

But Frye now says the perfect storm of circumstances that gave Pookie a fitting opportunity for revenge could have easily been avoided. This is true even if you do something as simple as slightly altering Nala’s image before associating it with the Shark Cat coin.

“There was an awful lot they could have done to avoid the most excessive potential liability,” Frye said of the Shark Cat team. “Obviously that didn’t happen here.”

Editor: Andrew Hayward