Blockchain and digital asset trade association, the Chamber of Digital Commerce (CDC), filed an amicus curiae brief on February 9 in support of French design house Hermès in the company’s landmark MetaBirkins case. Here’s why it matters:

Hermés, designer of the legendary Birkin bag, has been caught up in a contentious legal battle that very well may shape how trademarks are applied to digital assets in the Metaverse and beyond.

“Setting a Precedent For The Entire Digital Economy”

The luxury goods company formally sued artist Mason Rothschild (real name Sonny Estival) for his creation of “MetaBirkins” – non-fungible tokens (NFTs) depicting Birkin bags that Rothschild was able to sell for tens of thousands of dollars.

“As the Chamber of Digital Commerce stands with Hermès in this case, we are not just advocating for one brand’s rights,” read an amicus curiae brief from the trade association. “We are setting a precedent for the entire digital economy, ensuring that the trademarks which have become synonymous with trust and quality in the physical world carry the same weight in the digital one.”

Federal Jury Rules in Favor of Hermès

Hermès was handed a win last week when a federal jury in Manhattan found Rothschild guilty of cybersquatting, brand dilution, and violating the fashion house’s “Birkin” trademark. The ruling will require Rothschild to pay the company $133,000 as well as $23,000 for damages caused by cybersquatting.

A statement in response to: Hermès International, et al. v. Mason Rothschild. pic.twitter.com/pil6brfGTl

— MetaBirkins (@MetaBirkins) January 17, 2022

Rothschild has vowed to fight the verdict, however, with his lead counsel Rhett Millsap stating “this is not the end of this case.”

“I am not creating or selling fake Birkin bags,” Rothschild said in a statement. “I’ve made artworks that depict imaginary, fur-covered Birkin bags.”

The End Of MetaBirkins?

Rothschild had originally argued that his work was mere artistry in the tradition of portraying branded images, likening MetaBirkins to Andy Warhol’s celebrated Campbell’s soup cans.

The recent brief from the CDC retorts this argument, claiming that “Andy Warhol was not selling soup at a grocery store.”

The brief goes on to compare Hermès’ right to sell its own digital goods as comparable to NFTs by other brands, such as Tiffany & Co. or the Chicago Bulls. Additionally, the trade association argued that Hermès’ already established brand identity gave MetaBirkins its value.

“It is the identifying features attached to otherwise nameless and faceless lines of computer code which allow those digital goods to be bought and sold online in similar ways to how physical goods are bought and sold online,” the brief stated. “The fact that a company offers its goods in a digital space should not result in those products or that company receiving any less trademark protection than physical goods sold in the real world.”

As of the time of publication, it is currently unclear whether or not an appeal has been filed.

The post Chamber of Digital Commerce Backs Hermés in Landmark “MetaBirkins” Case appeared first on Cryptonews.

Steven Nerayoff, an early Ethereum advisor, leveled allegations at SEC Chair Gary Gensler on Tuesday, hinting at Gensler’s undisclosed deep ties with Ethereum and potential influence by the Chinese Communist Party (CCP).

Steven Nerayoff Ethereum ETFs Stir the Pot

Nerayoff alleged that the growing speculation surrounding an Ethereum ETF suggests a potential deeper involvement of the SEC with Ethereum than publicly acknowledged.

He specifically accused Gensler of indirectly endorsing the designation of ETH as a security by approving Prometheum in 2023 as the first and only special-purpose crypto broker-dealer licensed under SEC regulations—effectively backing an ETF under the radar.

"Specifically, he accuses Gensler of indirectly approving Prometheum Inc. to designate ETH as a security, effectively endorsing an ETF covertly. "https://t.co/CAP71sVm7N

— Eli (@elighvk) February 13, 2024

Prominent players like Fidelity, WisdomTree, and BlackRock have filed many applications for spot Ethereum ETF approval.

Despite declaring some popular cryptocurrencies as securities, the SEC hasn’t clarified Ethereum’s legal classification, however.

In the wake of the FTX collapse, Gensler has doubled the SEC efforts on crypto regulations. He also emphasized the sufficiency of current crypto regulations and stated that legal actions have been taken against exchanges for non-compliance.

Although it has yet to initiate trading or generate revenue, Prometheum co-CEO Aaron Kaplan announced plans to begin custodying institutional clients’ assets in the upcoming quarter.

Former Ethereum Advisor Raises Alarms Over SEC’s Ethereum Decisions

Prometheum’s assertion that it had discovered a compliant avenue for crypto trading was immediately criticized by legal experts within the cryptocurrency industry.

They contended that even if the SEC and the Financial Industry Regulatory Authority (FINRA) endorsed Prometheum’s framework, it would lack tradable assets.

Skeptics argue that while the SEC oversees securities, cryptocurrencies such as Solana and Ethereum resemble commodities like oil or gold. As a result, they fall outside the legal definition of security and are thus ineligible for registration.

In mid-2023, Prometheum also gained considerable attention by securing approval from FINRA, allowing it to function as a special-purpose broker-dealer for digital asset securities.

The suspicion is that although the SEC introduced this designation in 2021, it’s odd that it’s the only company that has obtained a license.

This seems to be why Steven Nerayoff has raised public concerns, alleging compromised integrity within the SEC and related entities.

He attributed this to the alleged influence of the Chinese Communist Party (CCP) over the Ethereum blockchain.

Additionally, reports from TruthLabs indicate the CCP may control over 66.6% of the ETH supply.

Nerayoff further highlighted the strategic influence wielded by the CCP through entities like Wanxiang, which has a major involvement with Prometheum.

These claims would substantially impact Ethereum’s decentralization, security, and regulatory status if true.

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