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NFTs, Lil Nas & Palantir

Legit.
Happy Monday! In the interests of it being a Bank Holiday, we’re keeping it short and sweet this week with one trend story and two news stories.
In today’s issue:
  • NFTs are good for lawyers.
  • Nike vs. Satan Shoes.
  • Peter Thiel’s latest (failed) venture: the NHS.

CRYPTO
NFTs have some legal issues.
Image: Quartz
Image: Quartz
A little over a month ago, I spent the weekend holed up in my room writing about how the NFT craze is good for law.
Since then, the craze has intensified in ways that are both very weird and very cool. Peel back the hype and one constant remains: legal implications are still the crux of the NFT trend.
Why? Crypto laws are like spaghetti code: loose, slippery, undefined. This leaves blind spots in the NFT universe that haven’t been plugged yet. Some examples, courtesy of ExtraCrunch:
a) It’s unclear how financial sanctions relate to NFTs. BitGo and BitPay were fined for allowing interactions in Iran and Cuba - jurisdictions where America forbids transactions.
b) Is meme-ified work fair game? If I screenshot someone else’s art, make an NFT out of it, and sell it - it feels like I’m breaking copyright laws, but there’s no precedent that explicitly says I am.
Even if there was, the likelihood of artists lawyering up is pretty low. Case in point: cartoonist Matt Furie asked a law firm to help him pro bono when his Pepe frog meme was hijacked by the alt-right.
  • “To really defend your copyright is something only companies like Disney can do.”
c) Unreliable blockchains can stunt value. There’s a value imbalance between NFTs and Ethereum, the blockchain NFTs exist on.
  • NFTs are selling for millions of dollars. Ether sells for less than $2,000.
This imbalance incentivises miners to undo or block transactions. There are legal precedents for assets being stolen from a centralized exchange, but there’s no precedent for what happens if the underlying blockchain itself gets manipulated.
THE TAKEAWAY
There’s good and bad here.
  • The bad: meme-ification is sweeping finance, with trends inflating and deflating within a matter of months. The law just can’t keep up.
  • The good: lawyers who sprint towards the blind spots in crypto will cash out. Trends within crypto will rise and fall, but crypto as an alternative to fiat isn’t going anywhere.
Bonus takeaway: NFTs have been upgraded from fringe conversation to the topic of most Clubhouse rooms, which means the bubble is about to pop. DAOs are the next big thing.
TRADEMARK
Nike sues over Satan Shoes.
Image: MSCHF
Image: MSCHF
Nike has filed a trademark suit against streetwear brand MSCHF for releasing blood-infused ‘Satan Shoes’.
The backstory. Last Monday, MSCHF teamed up with rapper Lil Nas X to release 666 pairs of ‘Satan Shoes’ - customized Nike Air Max 97’s that are embellished with a pentagram and infused with a drop of human blood.
  • The shoes, which are a follow-up to MSCHF’s line of ‘Jesus Shoes’, sold out in less than a minute.
Turns out Nike doesn’t appreciate being associated with human blood and the devil. In court filings, Nike:
  1. Accused MSCHF of causing “confusion and dilution” and said “decisions about what products to put the ‘swoosh’ on belong to Nike.”
  2. Was granted a temporary restraining order to bar MSCHF from shipping any more Satan Shoes.
The other side. Unfazed, MSCHF says the shoes are Banksy-esque works of social commentary intended “to criticize the ever-popular ‘collab culture,’ where brands like Nike collaborate with anyone willing to make a splash.”
THE TAKEAWAY
MSCHF does this kind of thing a lot.
The only potential obstacle standing in the way of a Nike win here is that is didn’t sue MSCHF over its Jesus shoes. Professor Alexandra Roberts thinks Nike can clear this obstacle:
  • There was less consumer backlash, less threat of boycott and less evidence of actual confusion over the Jesus sneakers.
P.S. you’re not the only one wondering how MSCHF got enough human blood to support six hundred shoes.
  • MSCHF’s founder told NYT six employees offered up their blood. When asked how, he said: “Uhhhhh yeah hahah not medical professionals we did it ourselves lol.”
Coolcoolcool.
COURTS
Peter Thiel’s latest venture is the NHS.
Image: OneZero
Image: OneZero
A secret £23m NHS deal with Palantir, a CIA-backed data firm, has been paused following a lawsuit by Open Democracy.
The backstory. The NHS and Palantir cosied up in March 2020 for a short-term project to analyse a “datastore” of health information following the pandemic.
In December, the NHS extended Palantir’s contract for two years for matters “far beyond” Covid - including Brexit and general government business.
Now… the government has pulled a U-turn, promising not to extend Palantir’s contract without consulting the public via a Data Protection Impact Assessment first.
THE TAKEAWAY
The pandemic has generated vast amounts of data, which form the crux of our scientific response against the virus. This data is by its very nature highly sensitive, personal medical information that people - surprisingly - don’t want in the hands of an American ‘spy tech’ company with a controversial rap sheet.
Zoom out. Palantir has been a supplier to the public sector since waaaay before 2020.
LEGIT ONE LINERS
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Legit. | Legal News @anniamirza

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