What Happens When Someone Steals a Copyrighted NFT?

They say that with great power comes great responsibility, and NFTs are one of the greatest examples of that.

A person is holding a picture of a person and animated character Shrek in front of black boxes and sphere with Ethereum logo on it

They say that with great power comes great responsibility, and NFTs are one of the greatest examples of this. The popularity of NFTs has given them great power, as people are now making fortunes and building careers off them.

But that power also comes with responsibility, as the space is now swarmed with fraudsters interested in carrying out nefarious activities. Some of these activities include stealing NFTs from legitimate creators.

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Now, the question remains; what to do when someone steals a copyrighted NFT? There are a few measures to take. These measures include going after the thieves through legal protection and raising the alarm on a public forum.

The Problem Of NFT Theft

NFT theft has become a huge problem in the industry. Ever since the volume of NFT trades moved from the low thousands to the high millions, people have been victims of copyright theft. But these actions aren’t just because NFTs are now popular. They are also because NFTs are a different sort of asset. 

NFTs aren’t tokens or coins, so it’s quite difficult to spend them. Unlike coins that have fungibility, we cannot substitute one value for the other. Each one has its specific value determined by the market. Asides from that, they are usually represented digitally—but vitally, NFTs themselves aren’t art. 

When someone purchases an NFT, they aren’t getting the digital art. The art itself is a mere approximation of what the NFT is supposed to be. 

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Instead, what they are getting is a unique hash on the blockchain with a transactional record and a hyperlink to the file of the artwork. The artwork itself is rather irrelevant, and the whole operation could go ahead with anything.

What this means is that it’s very easy for frauds to merely save the photo and sell it as their art. The process of minting an NFT itself makes it shockingly easy for these sorts of frauds to be successful. When minting an NFT, creators aren’t asked for evidence that the art about to be minted is really theirs. This means they could, theoretically, mint whatever they like without anything stopping them. 

And that’s precisely what has happened before.

What We Can Learn From Copyrighted NFT Theft

The most instructive case of copyrighted NFT theft has happened on Twitter. One interesting case was when a bot named Tokenized Tweets went about minting screenshots of viral tweets without the permission of their authors. The bot found it quite easy to do since there was no legal or regulatory barrier stopping it from doing that. 

One of the biggest victims of that slew of forgeries was Weird Undead, a Russian artist. She became aware of the bot’s actions when she saw someone tag it beneath a post of her most recent digital creations. After investigating the account, she found a screencap of her tweet listed on OpenSea. 

So, what did Weird Undead do to stop the bot? She filed legal notices with OpenSea and argued that the auction of her tweet was an “insane and pointless copyright infringement.” After she filed her notice, the NFT disappeared from the site. 

However, this doesn’t mean that the token went off the blockchain itself. Transactions recorded on the blockchain cannot be unrecorded. It most likely means that the OpenSea website simply chose not to list it anymore. If someone tech-savvy enough still wanted to purchase the NFT on the ETH blockchain, they certainly could. 

Another victim of the fraud, RJ Palmer, said that he had gone to great lengths to persuade Tokenized Tweets to take down his digital artwork. While he was successful at doing that, he said they really couldn’t be convinced to bring down the tokenized tweets of other influencers. 

William Shatner also fell victim to the crime, as a lot of his tweets became tokenized by the same bot. He was so angry that he led an entire campaign that eventually led to the banning of the bot on Twitter.

What Rights Do NFT Buyers Have?

However, it’s nearly impossible to unbundle copyrighted NFT theft from the legal protections both buyers and sellers have. When someone sells an NFT, what are they selling? When someone buys one, what are they getting? And lastly, is there any real legal reason why copyrighted NFTs cannot be stolen? 

While we may think of NFTs as digital assets in a class of their own, they do not exist outside copyright law. When a creator makes digital art, what they are doing is creating a work that is protected under copyright law. This means that the law ordinarily prevents other people from replicating that art and selling it without the express permission of the creator. 

In addition to that, when a person buys an NFT, they aren’t buying the copyright. The copyright remains with the creator, just like it does with other kinds of art. For example, when purchasing a picture of the Mona Lisa, or a shirt bearing the Mona Lisa, the buyer doesn’t suddenly become the owner of the masterpiece’s copyright. 

What this means in essence is that people have a real legal recourse if their copyrighted NFT is stolen by nefarious actors. They can report to the police or file a case against the site hosting the art. 

The Problem With Enforcement

It is easy to say copyright theft is illegal. Enforcing its illegality is a whole different ball game. 

The NFT market isn’t regional or even national. It’s global. That means that people don’t always have the option to report to the police since the offender might not be in the right jurisdiction. 

This throws a spanner in the works of artists looking to safeguard their copyrighted work. Another problem is that NFT platforms, generally speaking, do not care about this issue. 

So far, no NFT platform has put concrete effort into protecting the copyrights of artists before minting. It is disappointing primarily because copyright compliance is a low-hanging fruit that could instantly make NFTs even more friendly to creators. 

One might argue that there’s no legal framework for these global platforms to follow, but there is. The Berne Convention of 1886 is an international framework that guarantees standardized copyright protection at the moment a work is created. It has around 179 countries as signatories presently. 

Of course, there are still some legal gaps concerning digital art, but there is a good legal foundation to start from. The only thing that’s lacking is the will.

My Copyrighted NFT Has Been Stolen; What Should I Do?

If someone has copied an NFT and has minted it, or someone has minted digital art without permission, there are three main options. 

The first option, and the most likely one to work, is to contact law enforcement. A crime has been committed, and the police should be informed. The next thing to do is to contact a lawyer. Artists like Weird Undead were able to get their art off the OpenSea website by giving OpenSea a legal notice. 

If that doesn’t work, it would be a good idea to raise awareness about the fraud. People like William Shatner were able to get Tokenized Tweets banned by Twitter because they raised the alarm and made a huge fuss. If the victim has a big enough reach, they could even get the imposter banned or have them face real social repercussions for their crime. 

The last option is just to wait it out. NFTs are unlike any other asset, which means that people aren’t buying the digital art representing the token. The art could be almost anything, and they would still buy it. If an NFT has real utility, which may include access to a community and community perks, the victim may not need to do anything to the thief. They will not be able to offer the same value the NFT offers, and it’s unlikely they will make any profit off the art sale. 

People don’t just buy NFTs because they are NFTs. They buy them because of the person behind the project as well. If they aren’t there to put a seal of approval on their project, it may never turn a profit. 

Of course, these are all suboptimal solutions. The best option, it would seem, would be for NFT platforms to have strong copyright regulations. But while we wait for the industry to mature and get to that level, these efforts can help safeguard copyrighted NFTs.

On the Flipside

  • Mischievous actors may not plagiarize art just to turn a profit, they could simply do it out of spite. In that case, the confusion resulting from recreating an NFT would be their gain. 
  • It’s not a sure thing that NFT platforms will ever agree to a coherent regulatory framework for NFTs.
  • OpenSea recently released a statement saying it regularly delisted and banned accounts that sold copyrighted NFTs. However, the practice remains rife on the platform.

Why You Should Care

One of the biggest hurdles to a Web 3.0 future is a perception of danger. Decentralized spaces must still be safe for intellectual property and understanding how to combat copyright theft is part of that. 

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

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Victor Fabusola

Victor Fabusola is a Blockchain & Crypto Content Writer. He excels in crafting long-form educational guides, opinion pieces, and reviews in niches such as DeFi, NFTs, and Web 3.0. Outside of his work at DailyCoin, he loves conscious hip-hop and classical music and engaging in intellectually stimulating conversations with his friends.