Nfts
PleasrDAO suing Martin Shkreli for intellectual property rights is a sign of a maturing ecosystem
The lawsuit shows that decentralized organizations increasingly need legal structures to operate in the off-chain world.
PleasrDAO may be one of the most crypto-native organizations, but it uses a very “traditional” tactic: a good old-fashioned lawsuit.
The DAO prosecuted a convicted felon known as “pharma-bro”, Martin Shkrelion June 11, for violation of intellectual property rights.
The collective, which paid $4.7 million for the rights to the one-of-a-kind album Once Upon a Time in Shaolin, recorded by famed hip-hop group Wu-Tang Clan, says Shkreli made several unauthorized copies of the album and published it. them to the public.
The lawsuit highlights the growing trend of decentralized organizations being faced with the need to create legal structures for their operations.
According to Adam Miller, CEO and co-founder of MIDAO, an organization that helps DAO and Web3 projects legally incorporate in the Marshall Islands, PleasrDAO’s lawsuit could be a step towards a more mature DAO ecosystem.
“It pushes the boundaries and other DAOs realize they should have a legal entity,” Miller told The Defiant. Miller added that this shows Web3 users that legal entities are not entirely anti-crypto or a bad idea.
Pplpleasure NFT
PleasrDAO is a collective of DeFi traders, early NFT collectors, and digital artists who have been collecting unique NFTs since 2021. PleasrDAO first organized to buy an NFT by digital artist Emily Yang, also known as Pplpleasr, after whom the DAO is named.
The organization, legally represented as an “exempt foundation corporation,” meaning it is not subject to income tax, withholding tax or capital gains taxes, continued Martin Shkreli on June 11.
One of a kind album
Once Upon a Time in Shaolin is a one-of-a-kind album created by popular hip-hop group Wu Tang Clan with the aim of “saving the music industry from crisis.”
Only one individual copy was created, then sold, and had not been heard until Shkreli reportedly played portions of the album during a livestream he hosted on June 8 and 9, during an event he called the “Wu”. -Official Tang listening party.
Shkreli’s decision came just days before PleasrDAO planned his own first public hearing, which took place in a New York church on June 8.
Church where the album was performed.
Controversy ensues
PleasrDAO went to court to protect its property and some members of the crypto community were quick to criticize the decision.
Internet troll pseudonym 0xMakesy wrote on Several users agreed, including Hadron Labs general counsel “lawpanda” who wrote “hey, I could have just called it Pleasr Foundation, smdh.”
But Miller said legal entities don’t inherently reduce decentralization.
“Decentralization might not even refer to the social structure but rather the underlying technology,” he said. “If organizations use a distributed ledger for their tokens, then why not call it decentralized? »
Hayden Adams, founder of Uniswap echoes the feeling.
“People who complain about DAO lawsuits don’t realize that Pleasr is essentially a member-owned museum,” he wrote on its components and assets live in chain.”
“This is not a public DAO that everyone can join, [and] of course, they are protecting the intellectual property rights on the Wu Tang album that they spent $5 million on,” Adams said.
DAO status in all jurisdictions
Miller works directly with the Marshall Islands, which is one of the only jurisdictions to explicitly recognize DAO legal structures.
And for him, these types of organizations are useful to governments themselves, contributing to essential transparency. “Governments benefit from much more visibility into how a company operates,” he explained. It’s a trade-off, in Miller’s mind, that despite using cryptography in the first place, authorities will simply have to accept it.
Another jurisdiction that recognizes DAOs is the state of Wyoming in the United States. The state recently created a statute called DUNA – the Decentralized Unincorporated Nonprofit Association – which widens the already DAO-friendly legal waters in the state.
Experts in crypto-related law gave it away Two thumbs up after his passage.
A number of other states as well would have recognize and have adopted DAO-specific regulations, including Utah, Vermont, and Tennessee.
Legal clarity Onchain
While the previous examples show progress through regulatory clarity for DAOs in the traditional world, some projects aim to find legal certainty in a decentralized economy.
Kleros, nicknamed “Justice Protocol,” is an open source online dispute resolution protocol that uses blockchain and crowdsourcing to fairly resolve disputes.
PleasrDAO is not the only DAO taking legal action. Token holders of Aragon, a project intended – perhaps ironically – to help create and manage DAOs, have voted to sue the Aragon Association for allegedly proposing a unjust buyout plan in the midst of its dissolution.
On November 21, the DAO vote to award 300,000 USDC to Patagon Management, a Delaware-based company owned by Diogenes Casares, to file a lawsuit against Aragon.
The funds allocated to support the lawsuit constitute a “highly conditional grant” that was sent to Patagon Management LLC, a Delaware-based trading company that previously engaged in “similar legal action” against the alleged founder of SpartacusDAO , Wei Wu, on behalf of the token holders. .
A similar lawsuit against Wu refers to a $35 million freeze that a judge imposed on the SpartacusDAO chief after SPA token holders were unhappy with the crypto yield project’s progress.
Off-chain impact
Francisco Díaz, researcher at TalentDAO, which also pparticipates in the decentralized scientific space, asserts that legal recourse is particularly important in DeSci.
“At DeSci, it is important to have this legal entity so that we can register intellectual property on medical patents, for example,” he emphasized.
“If a DAO has a lot of influence in the physical world, then it might be worth it for them to seek jurisdictional protection,” Díaz said. “If a DAO wants to have an impact outside of the digital world, it must have an “off-chain” entity capable of handling legal situations like these.
Music for the people
As for the status of the album that caused the controversy, PleasrDAO decided to give people a chance to listen to it, even though it was supposed to be released in 2103.
Fractions of the album are now available for purchase on his official site as a $1 NFT on Base. Each purchase speeds up 2103 by 88 seconds.
As of this writing, over 95,500 albums have been collected by 4,308 unique collectors.